Internship Alfalah

EXECUTIVE SUMMARY
Following privatization, Bank Alfalah emerged as new identity of Habib Credit and
Exchange Bank with a revived prpose and commitment! Charged with the strength
of Ab "habi consortim and nder the leadership of his Highness #heikh $ahayan
%abarak Al & $ayayan, the bank has already made significant contribtions in
bilding and strengthening both corporate retail&banking sectors in 'akistan!
Bank Alfalah has invested in revoltionary technology to have
an extensive range of prodcts and services! (his facilitates its commitment to
a cltre of innovation and seeks ot synergies with clients and service providers to
ensre ninterrpted services to its cstomers! )t perceives the re*irements of its
cstomers and matches them with *ality prodcts and service soltions! "ring the
past seven years, it has emerged as one of the foremost financial instittion in the
region endeavoring to meet the needs of sch a dynamically changing market!
"esigning the prodct portfolio of bank response to the cstomer+s preferences, the
prodct like ,oyal 'rofit, ,oyal 'atriot and ,oyal Cstodial are prime examples of
*ality and innovation providing timely banking opportnities to cstomers of bank!
Assessment of the needs and wants of the cstomers is an on going process at Bank
Alfalah, which helps to continally develop new prodcts and services! (o
continosly offer corteos, professional and advanced banking soltions, the team
of bank has recently been re-venated by going thogh training programs with a focs
on information technology!
(o make their banking soltions become accessible to more and more people, they
have embarked pon a rapid expansion program, aiming to provide a networking that
makes the services available to any of their cstomers in all the ma-or rban centers
of 'akistan with a view to go international in the ftre!
.ith their key indicators of progress already soaring to new heights, the bank is
committed to dedicate all its energies, resorces and time to bring higher vale and
satisfaction to their cstomers, employees and shareholders! (he graph of bank is
going p and p every year! (he ratio of profit is increasing at good percentage! (hy
bank is serving the people at high level of standard by going according to the whishes
of the cstomers!
Lets Look Ahead Towards a Brighter Future Together /
HISTORY OF BANKING HISTORY OF BANKING
According to 'rofessor Berton0
Banks are the guardian & distributor of one!"
Bank is a pipeline through which currency moves into and out of circulation.
Bank accepts deposits and repays cash to its cstomers on their demand! (he Bank
borrows money at a lesser rate of interest and lends it to the borrowers at a higher
rate! )t is ths a profit&lending concern! Bank cannot lend all the money that has been
deposited with it! )t has to keep a certain portion of the total deposits in cash with
them in order to meet the cash re*irements of the individals and bsiness concern!
Banking Histor! Banking Histor!
.ord Bank is said to be derived from the words Banc us or Banque or Bank. (he
history of banking is traced to as early as 1222 BC! (he priests in 3reece sed to keep
money and valables of the people in temples, acted as financial agents! (he origin of
banking is also traced to early goldsmiths! (hey sed to keep strong safes for storing
the money and valables of the people! (he FIRST STAG# in the development of
modern banking, ths, was the accepting of deposits of cash from those persons who
had srpls money with them!
(he goldsmiths sed to isse receipts for the money deposited with them! (hese
receipts began to pass from hand to hand in settlement of transactions becase people
had confidence in the integrity and solvency of goldsmiths! .hen it was fond that
these receipts were drawn in sch a way that it entitles any holder to claim the
specified amont of money from goldsmiths! (hese receipts were the earlier bank
notes! (he S#$ON% STAG# in development of banking ths was the isse of bank
notes!
(he goldsmiths soon discovered that all the people who had deposited money with
them did not come to withdraw their fnds in cash! (hey fond that only a few
persons presented the receipt for encashment dring a given period of time! At the
same time, they fond that they were being constantly re*ested for loan on good
secrity! (hey thoght it profitable to lend at least some of the money deposited with
them too the needy persons! (his proved *ite a profitable bsiness for the
Lets Look Ahead Towards a Brighter Future Together 1
goldsmiths! (his was the THIR% STAG#& in the development of banking!
By experience the banks came to know that they cold keep a small proportion of the
total deposits for meeting the demands of cstomers for cash and the rest they cold
easily lend! (hey allowed the depositors to draw over and above the money actally
standing to their credit! )n Economics terminology we can say that they allowed the
overdraft facilities to their depositors! (his was the FO'RTH STAG#& in
development of banking!
.hen every bank isses receipts and most of them allowed the overdraft facilities,
there was then too mch confsion in the banking system! (he banks in order to earn
profits cold not keep ade*ate reserves for meeting the demands of the cstomers
for cash! (he failres on the part of the bankers to retrn money cased widespread
distress among the peoples!
)n order to create confidence among the people, steps were taken to reglate the
banking organization! A conference was held in $remberg in 1548. )t was decided
that a bank shold be set p by the state, which shold streamline the banking
organization and techni*e! (he first central bank was formed in 3eneva in /456!
Bank of England was established in /789! (he responsibility of issing of notes is
now entrsted to a central bank of each contry!
FOR(S OF BANK FOR(S OF BANK
Lets Look Ahead Towards a Brighter Future Together :
F;,%# ;F BA$<#
#chedled Banks
$on&#chedled
Central Bank Commercial Banks
INTRO%'$TION INTRO%'$TION
Following privatization, Bank Alfalah emerged as new identity of Habib Credit and
Exchange Bank with a revived prpose and commitment! Charged with the strength
of Ab "habi consortim and nder the leadership of his Highness #heikh $ahayan
%abarak Al & $ayayan, the bank has already made significant conditions in bilding
and strengthening both corporate retail&banking sectors in 'akistan!
"esigning the prodct portfolio of bank response to the cstomer+s preferences, the
prodct like ,oyal 'rofit, ,oyal 'atriot and ,oyal Cstodial are prime examples of
*ality and innovation providing timely banking opportnities to cstomers of bank!
Assessment of the needs and wants of the cstomers is an on going process at Bank
Alfalah, which helps to continally develop new prodcts and services! (o
continosly offer corteos, professional and advanced banking soltions, the team
of bank has recently been re-venated by going thogh training programs with a focs
on information technology!
(o make their banking soltions become accessible to more and more people, they
have embarked pon a rapid expansion program, aiming to provide a networking that
makes the services available to any of their cstomers in all the ma-or rban centers
of 'akistan with a view to go international in the ftre!
.ith their key indicators of progress already soaring to new heights, the bank is
satisfaction to their cstomers, employees and shareholders!
(he graph of bank is going p and p every year! (he ratio of profit is increasing at
good percentage! (hy bank is serving the people at high level of standard by going
according to the whishes of the cstomers!
$O((#R$IA) BANKING S$#NARIO IN $O((#R$IA) BANKING S$#NARIO IN
*AKISTAN *AKISTAN
At the time of independence in /895, there were :6 schedled banks with /84 offices
in ='akistan> bt by December 31, 1973, there were /9 schedled 'akistani
commercial banks with :,1:: offices all over 'akistan ? 59 offices in foreign
contries!
$ationalization of Banks was not done 1
st
1anuary 1974 nder the $ationalization
act /859, de to certain ob-ectives! Bt it had negative effects on efficiency of the of
the banking sector afterwards a privatization Commission was set p on @anary 11,
/88/, the commission transferred many banks to the private sector i!e!, %CB ? ABA!
(he government approved ? permitted the establishment of /2 new private banks in
/88/0 hence many new private banks have incorporated, since then, BA$<
AAFAAAH in one of the namely established private schedled banks in 'akistan!
INTRO%'$TION TO BANK A)FA))AH INTRO%'$TION TO BANK A)FA))AH
Bank of Credit ? Commerce )nternational BBCC)C was a 'akistan based bank,
established by %r!Agha Hassan Abdi from DBA, in association with D!A!E and
Erope! BCC) has its branches in 59 different contries of the world! )t had its :
branches in 'akistan! )n /88/, the BCC) was banned, when it was accsed by
Eropean contries, that the bank was involved in some illegal operations with 3lf
contries! (he ma-or reason behind Eropean accsation was that BCC) was of
)slamic mode! (herefore, the bank was closed de to international pressre! (hen, its
: 'akistani branches were taken over by the 3overnment of 'akistan, which were
named as Habib Credit and Exchange Bank BHCEBC and these were working as
sbsidiary of Habib Bank Aimited!
Following the privatization in @ly /885, Habib credit and Exchange Band assmed
the new identity of Bank Alfalah on Febrary 14, /886! )t is now Ab "habi based
bank as the family of #heikh $ahayan %barik Al $ahayan prchased 52E of its
shares and :2 E shares remained with Habib Bank on behalf of 3overnment of
'akistan!
)t has it 91 branches in /5 cities in 'akistan! (he "!3!<han branch was opened in
Agst 1221! Alfalah has emerged as one of the leading commercial banks in the
financial sector of 'akistan! Charged with strength of Ab "habi consortim and
nder the leadership of his highness #heikh $ahayan %barak, minister of higher
edcation and scientific research and prominent member of ,oyal family! (he bank is
energized with vision, envisaging!
(he development of varios sectors in 'akistan! (he bank has already made
significant contribtion in bilding and strengthening both corporate and retail banks
sector in 'akistan! Assessment of the needs and wants of cstomer is an on going
process at Bank Alfalah, which help to centennially develop new prodcts of services!
"esigning the prodct portfolio in response to royal patriot, royal cstodial, Alfalah
car finance, Alfalah rpee traveler che*es home loans are prime example of *ality
innovation providing timely banking opportnities to cstomer! (o continosly offer
corteos, professional and advanced banking going throgh training programs with
focs to information technology has recently re-venated soltion the team of bank!
.ith their key indicators of progress a steady soaring to new heights, the bank is
satisfaction to their cstomers and employers!
(he graph of the bank is going p and p every year! (he ratio of profit is increasing
at a good percentage! (he bank is serving the people at high level of standard by
according to expectation of cstomers!

Evolution of Islamic banking Evolution of Islamic banking
)n /869 3eneral +ia ', Ha- made IS)A(I$ I%#O)OGI$A) $O'N$I)! TH#N
AFT#R . Y#ARS IS)A(I$ (O%# OF FINAN$# was introdced bt people did
not accept becase they said these are not IS)A(I$ in tre sense! )n .//.
S'*R#(# $O'RT OF *AKISTAN had taken decision of INT#R#ST FR##
BANKING! 'NIT#% BANK took stay order from the cort! (hen it was decided that
there shold be a separate )I$#NS# for )#AA%)C BA$<#! #o first of all, %eezan
Bank took the license of )slamic Banking! (hen Alfallah )slamic, %slim
Commercial Bank, and Askari Bank took the license! )n @anary 1229, Alfallah
started )slamic Banking! And in .//0, Alfallah )slamic Banking "ivision %ltan
started working !(r1 I2A+ FAROO3 is spervising the )slamic bank of Alfallah
Bank!
BRAN$H )#4#) HI#RAR$HY BRAN$H )#4#) HI#RAR$HY

Branch %anager
%r!ahsan *reshi
;peration %anager
%r! Faisal
;'E,A();$
"E'A,(%
E$(
F;,E)3$
EFCHA$3E
"E'A,(%E$(
Cash "epartment
%r! ikhla*
AGC ;pening
%s Hmera
,emittance "ept!
%rs! Hrat l ain
Acconts "ept!
%r! %!.a*ar
)mports
%r! Amar
Exports
%s! %aria
Corporate %anager
%r!m! sa*ib
Our 4ision Our 4ision
Establish )slamic banking as banking of first choice to
facilitate the implementation of an e*itable economic
system, providing a strong fondation for establishing
a fair and -st society for mankind
~The introduction of a just and equitable financial system by being
a world class multi-purpose financial institution, providing a range of specialized
services, working on Shariah principles.
(ission Stateent (ission Stateent
(o be a premier )slamic bank, offering a one&stop shop
for innovative vale added prodcts and services to or
cstomers within the bonds of #hariah, while optimizing
the stakeholdersI vale throgh an organizational cltre
based on learning, fairness, respect for individal
enterprise and performance!
TH# *HI)OSO*HY TH# *HI)OSO*HY
Excellence in service
Hality performance
'rodct innovations
TH# BOAR% TH# BOAR%
H! H! #heikh Hamdan Bin %abarak Al&$ahayan
Chairman
%r! Abdlla <halil Al&%tawa
%r! ;mar J! Al&Askari
%r! Abdllah $asser Hawaileel Al&%ansoori
%r! $adeem )*bal #heikh
Chairman
#ecretary of the
Board
"irector C E ; B
BmemberC
"irector
B3ovt! $ominatedC
"irector
B3ovt! $ominatedC
"irector "irector
%r! )kram Dl&%a-eed #ehgal
%r! %ohammad #aleem Akhtar
Chief Exective ;fficer
BOAR% OF %IR#$TORS BOAR% OF %IR#$TORS
$OR*ORAT# INFOR(ATION $OR*ORAT# INFOR(ATION
Company Secretary Company Secretary
%r! Hamid Ashraf
Auditors Auditors
A! F! Fergson ? Co!
Chartered Accontants
Head Office Head Office
B! A A Bilding
)! )! Chndrigarh ,oad
'!;! Box 755:
<arachi
#5#$'TI4# $O((ITT## #5#$'TI4# $O((ITT##
%r! %ohammad #aleem Akthar
Chairman
%r! 'arvez A! #hahid
%r! )kram Dl&%a-eed #ehgal
%r! %ohammad Kosf
%r! (anweer A! <han
%r! #ira-ddin Aziz
%r! %ahmood Ashraf
Lets Look Ahead Towards a Brighter Future Together /2
BANK A)FA))AH6s S)OGAN BANK A)FA))AH6s S)OGAN
Aet+s Aook Ahead (owards a Brighter Ftre (ogether!
BRAN$H#S N#T7ORK BRAN$H#S N#T7ORK
Bank Alfalah has 44 branches in 1: cities of 'akistan! "etail of some ma-or branches
as nderL &
Karachi Karachi
%ain branch, B!A! Bilding, )!)! Chndrigar ,oad
Cloth market branch
Clifton branch
#hahrah&e&Faisal Branch
@odia Bazar branch
<orangi indstrial area branch
%!A! @inah ,oad Branch
#!)!(!E Branch
'aper market branch
$orth <arachi branch
3lshan&e &)*bal
<arachi stock exchange
$orth $apier road branch
#!)!(!E Branch
'!E!C!H!# Branch
(imber %arket Branch
"!H!A! Branch
Lahore Lahore
3lberg branch
"efense branch
Circlar road branch
Lets Look Ahead Towards a Brighter Future Together //
(ownship branch
A"A 'laza branch
Badami bagh branch
Allama )*bal branch
#hah Alam %arket branch
Rawalpindi Rawalpindi
%all road branch
#atellite town branch
Other Branches Other Branches
#ialkot
)slamabad
'eshawar
Multan.
Faisalabad
Hetta
#kkr
Hydrabad
3-ranwala
,ahim Kar khan
#ahiwal
#argodha
3-rat
%ardan
"!3!<han
$ow, Bank Alfalah is going to establish its branches in some foreign contries!
Hopeflly, in "haka BBangladeshC and Bahrain, its branches will be opened in the
year 1229! #ome branches will also be opened in Eropean contries! Bank is going
to establish its branches in "!3! <han, boray&e& wala and in Bahawalpr as well!
ABO'T TH# BANK F#AT'R#S ABO'T TH# BANK F#AT'R#S
(Islamic Banking)
For 8ros8erit! in Business&
$oe to Is,ai9 Banking&
For Is,ai9 Banking&
$oe to Bank A,fa,,ah:
Bank Alfalah Aimited is an established bank! )t has some special featres with the
help of those it is growing rapidly! (he )slamic banking system has seen resrgence in
the last few years! (his financial system is ni*e since profitability is not the
ltimate aim bt the social implications of the economic decision are e*ally
important! Commnal .elfare and social -stice are integral vales to be pheld
dring normal corse of bsiness and can not be neglected! .hile profitability and
economic viability as a priority is not the sole criterion for -dging the performance of
an )slamic financial )nstittion! (his ensres a more e*itable distribtion of wealth
and enhanced e*ity participation!
.hile this ni*e form of financial intermediation can emerge as an impactfl engine
of economic growth, this mode of finance needs effective nrtring before its tre
potential can be realized! )f implemented sagaciosly )slamic banking can contribte
effectively to national economic activities! .e realize the significant market that
exists in 'akistan which demands #haria compliant financial soltions and aspire to
serve this market segment with high service and vale! Bank Alfallah )slamic banking
branch nits have been institted all over 'akistan and active expansion is nderway!
;r comprehensive )slamic banking prodct portfolio incldes deposits for crrent
acconts, saving acconts and investment deposits, capital financing trade financing,
hose financing and leasing etc which imbibe prodct featres based on the #haria! At
the same time there is a strong focs on research and innovation in order to give or
clients greater retrns and secrity! .e wish to promote an operating system that is
Lets Look Ahead Towards a Brighter Future Together /:
geared towards spplying state of the art ctting edge financial prodcts and edcate
potential clients in the benefits and advantages of the )slamic banking system!
Pursuit of Excellence Pursuit of Excellence
Dedicated Professionals Dedicated Professionals
Outstanding Work Environment Outstanding Work Environment
Efficiency Efficiency
Customer Services Customer Services
Suggestions Asked From Customers Suggestions Asked From Customers
Employee Benefits Employee Benefits
Computerized Working Environment Computerized Working Environment
*RO%'$TS *RO%'$TS
Current Account
Alfallah Musharaka Saving Account
Musharaka Time Deposits on PLS Basis
Alfallah Car Ijarah
Alfalah Corporate Ijarah
Alfalah Consumer Ijarah
Alfallah Musharaka Homes
Trade/Project financing
Import/Export Financing
Remittances
All Types of Guarantees
Safe Deposit Lockers
On Line Banking
"esigning its portfolio bank is committed to develop prodcts that give more vale to
its cstomers in both the sectors in corporate and consmer need!
$o8etitors $o8etitors
"espite notable economic ncertainties, the financial strength of Bank Alfalah Aimited
has greatly enhanced dring the previos years! (he sccessfl expansion program
proved their capability and commitment in comparison with the competition in the
financial sector! (he Banking strctre in 'akistan comprises ofL
Central Bank
Commercial Banks
)nvestment Banks
"evelopment finance )nstittions B"F)sC
#pecialized Banks
Foreign Banks
Bank Alfalah is a private commercial IS)A(I$ Bank so the ma-or competitors of
Alfalah )slamic Bank are the followingL
Askari Commercial Bank Atd
%slim Commercial Bank
%eezan Bank
Internshi8 *rogra Internshi8 *rogra
) did internship of E)3H( weeks at Bank Alfalah Aimited! (here ) worked in six
departments! ) started p with accont opening, where ) learned abot different types of
acconts, and how to open a new accont, etc! Also ) worked in (",, C", and
collection! Here ) worked with %s! Hmera
(hen ) moved to Cash and "eposits "epartment! (he in charge of this department is %r!
,ana )khla* (here ) learned the handling of Cash!
(hen ) was sent to Acconts "epartment where ) .orked nder %r! %bashir!
(hen ) was send to Foreign Crrency Acconts "epartment! Here ) worked nder %r!
Amir!
After working in Acconts ) worked in (rade Finance department! (he in charge of this
department is %aria )rm! Here ) learned abot )nternational Banking and the procedre
of import and export!
A,fa,,ah $AR i;arah A,fa,,ah $AR i;arah
)t is basically transfer of sfrct of fixed asset to another person for an agree period at
an agreed consideration! Dnder i-arah agreement the asset will be given to the cstomer
on a rent for the period agreed at the time of contract!
Following the mission of providing )slamic Based Financing, Bank Alfalah+s )slamic
Banking has introdced> Alfallah Car )-arah> a sharia compliant car leasing scheme! )t is
based on the principles of )-arah and is completely free from the element of interest! (his
prodct is ideal for interest aversive individals, looking for a car financing scheme that
not only provides the convenience of a well designed prodct bt also helps in avoiding
interest based transaction! )n =Alfallah Car )-arah>the vehicle BcarC remains in the
ownership and risk of bank and the cstomer only pays the rental for se of the vehicle
BcarC -st like hose rent! (he =Alfallah Car )-arah> scheme has been designed nder the
spervision of or sharia advisor Bcentre For )slamic Economics providing training and
consltancy of )slamic Banking to )slamic Banks throgh its sharia advisorsC! %oreover
or sharia advisor %fti <halil Ahmad Azami shall oversee the activities of Bank
Alfallah+s )slamic Banking on day to day basis to ensre that all the docmentation and
procedres are flly compliant to )slamic Aaws! (he sharia advisor shall also periodically
review the activities and approve its new prodcts! !
(he Centre of )slamic Economics is operating nder the chairmanship of
@stice %hammad (a*i Dsmani!
;n the other hand, a conventional car financing scheme is actally an interest based loan
given by the financial instittion and interest is charged on that loan! Also, the lease
contact is not in compliance with )slamic #haria and has ,iba and other n&)slamic
elements in it!
Alfallah Car )-arah gives yo the flexibility of ac*iring all locally assembled new cars
costing p to ,s! /!2 million! Ko can pay in flexible, easy rentals over a period of :, 9 or
4 years, with as low as /4E secrity deposit! Bank Alfallah )slamic Banking being the
owner of car will be responsible for insrance of the car and for paying the insrance
premim! Dntil the availability of )slamic )nsrance in 'akistan the )nsrance will be
done nder the present insrance modality! Kes, yo can by the car prior to the
termination of lease! (he rental agreement will contain the prchase price schedle! After
receiving the completed application form along with the re*ired docments, yor
application will be processed in :&9 bsiness days!
$ar I;arah < Is,ai9 $ar Finan9ing
;r totally halal ato finance facility that is very affordable, with *ick processing and
minimal docmentation! Car financing that is very competitively priced, hassle&free, and
totally Halal! )-arah is simply a rental agreement nder which the car is given on rent for
an agreed period ranging from : to 4 years! (here is no advance rental, no p&front
insrance payment, and as little as 12E secrity deposits!
Rights & ,iabi,ities of O=ner >?s 'ser
An )slamic )-arah is an asset&based contract, i!e! the Aessor shold have ownership of the
asset dring the crrency of the contract! Dnder )slamic #hariah, all ownership related
rights and liabilities shold lie with the owner while all sage&related rights and liabilities
shold lie with the ser! A conventional lease contract does not distingish between the
natre of these liabilities and dmps all liabilities on the ser, which is contradictory to
)slamic #hariah! Dnder )-arah, all ownership&related risks lie with the Bank while all
sage related risks lie with the ser, ths making the Aessor the tre owner of the asset
and making the income generated throgh the contract permissible BHalalC for the Bank.
$ontinuation of ,ease renta,s in 9ase of tota, ,oss or theft of >ehi9,e
)f the leased vehicle is stolen or completely destroyed, the conventional leasing company
wold contine charging the lease rent till the settlement of the )nsrance claim! Dnder
the )slamic system, rent is consideration for sage of the leased asset, and if the asset has
been stolen or destroyed, the concept of rental becomes void! Alfallah bank does not
charge the lease rental!
Is there a *ena,t! for )ate *a!ent of Rent and ho= is this 8erissib,e
under Is,ai9 Shariah@
)n most contemporary financial leases, an extra monetary amont is charged if rent is not
paid on time! (his extra amont is the considered as ,iba and is Haram! (his amont is
taken by the leasing instittion! Dnder )-arah, the Aessee may be asked to ndertake that
if he fails to pay rent on its de date, he will pay certain amont to a charity which will be
administered throgh the )slamic Bank! For this prpose the bank maintains a charity
fnd where sch amonts may be credited and disbrsed for charitable prposes!
Ke! Features of $ar I;arah
$o application fee
Ease of ac*iring any new locally assembled car
$o pfront )nsrance 'ayment
$o advance ,ental
Available in tenres of :, 9 and 4 years
%inimm secrity deposit as low as /4E
(his facility is for locally manfactred cars of #zki, (oyota, Honda ? the new
model of #antro only!
Renta, $a,9u,ations
(o calclate the monthly rentals simply mltiply the cost of the car with the rental factors
given in the table below or se or online rental calclator
Rental Calculation for new cars``
Security Deposit 3 years 4 years 5 years
15% 0.032303 0.026765 0.023652
20% 0.030619 0.025398 0.022240
25% 0.028934 0.024032 0.021273
30% 0.027249 0.022666 0.020083
35% 0.025565 0.021299 0.018894
40% 0.023880 0.019933 0.017704
45% 0.022195 0.018567 0.016515
50% 0.020511 0.017200 0.015325
A No se8arate Insuran9e =i,, be 9harged
For example: )f yo are interested in a car costing ,s! :22,222 for a tenre of 4 years
and are willing to pay a 42E #ecrity "eposit, yor monthly rental wold be,
Rs. 300,000 X 0.015325 Rs.4, 597/- per month for 5 years ``
(``All other costs will be charged at actual)
Re-uired %o9uents for $ar Finan9e Fa9i,it!
MA3E A)%)( BE(.EE$ 1/&44 KEA,#N
/C Copy of national identity card!BnewC
1C Copy of driving license BoptionalC!
:C $!(!$ certificate!
9C Copy of crrent tility bill of residence!
4C Bank accont statement for last six months from the date of application!
7C #ignatre verification from banker!
5C Copy of $)C of references provided!
6C 1 passport size photographs!
Additional Requirements for Business Class Individuals Additional Requirements for Business Class Individuals
aC Copy of $)C of partners!
bC Copy of 'artnership deed Bif applicableC
cC $;C from other partner Bif applicableC
Additional Requirements For proprietor Additional Requirements For proprietor
Bsiness proof Bank Certificate, $($ certificate!
Additional Requirements for Salaried Persons Additional Requirements for Salaried Persons
aC Certificate from employer showing permanent employment for the last 1 years!
bC ;riginal salary certificate!
cC Copy of Form18 B in case of "irector of Aimited CompanyC
Ho= 9an I a88,!@
#impleO All yo need to do is fill ot a cstomer application form, attach the re*ired
docments mentioned in the form and get yor financing approved in a /&1 working days!
(o experience the comfort of or personalized services -st visit yor Alfallah Bank
Branch!
A)FA))AH HI)A) $AR% A)FA))AH HI)A) $AR%
Alfalah Hilal card is debit card that gives yo access to yor bank accont! Alfalah Hilal
Card allows yo to prchase goods merchant establishments across 'akistan and abroad
and also gives yo the freedom to withdraw cash from any PisaGElectronG'ls A(%s in
'akistan and abroad, and all Aocal Bank Alfalah and / link A(%s!
(he Alfalah Hilal Card comes with all saving and crrent acconts except $on resident
BordinaryC acconts with -oint mandate or condition mandate! However, acconts with
-ointGconditional mandate can obtain the Alfalah Hilal Card on re*est by completing the
re*ired formalities!
(he main benefit of being a Alfalah Hilal Cardholder is that yo en-oy nparallel access
to yor accont&whatever yo want, wherever yo go! Besides, yo can control yor
finances since the balance in yor accont determines yor spending limit! Alfalah Hilal
Card is accepted at more locations worldwide than any other debit card available in
'akistan! Ko can now en*ire on yor balance or withdraw cash sing A(%s! Ko can
se all Alfalah A(%s, local /linkA(%s and all other bank+s 692,222 A(%s worldwide on
the P)#A electron network for cash withdrawals! #b-ect to the maximm cash
withdrawals limit of ,s!42, 222G&per day! 'resently, the card can be sed at over 5,222
establishments in 'akistan and at over /: million otlets worldwide, where the P)#A sign
is displayed! (he card is also welcomed at over 692,222 A(%s worldwide!
(here is no monthly otstanding in the case of Alfalah Hilal Card! yor accont will be
instantly debited to the extent of prchase made or the amont withdrawn from A(%s in
addition to other charges on Alfalah Hilal Card! if in case of losing yor card, it is
important to report Alfalah call center ///&114&///!or it is also advisable to report in
writing! (here will be nominal charges of ,s!122 for the replacement of the card!
Lets Look Ahead Towards a Brighter Future Together 1/
#as! HoeB Is,ai9 Housing Finan9e #as! HoeB Is,ai9 Housing Finan9e
C(usharika HoesD C(usharika HoesD
.elcome to 'akistan+s long awaited totally #hariah&compliant Home Finance facilityO
;ne that is comprehensive, affordable, and totally hassle&free! At Alfallah Bank, we are
committed to meeting or cstomers+ needs in a trly #hariah&compliant manner copled
with dedicated service excellence! Alfallah Bank+s Easy Home is the answer yo+ve been
waiting for
Home Financing Options Home Financing Options
Buy Your Home: Buy Your Home: property: 80 bank: 20 customer property: 80 bank: 20 customer
.ith this facility, yo no longer need to -st dream abot the home yo want for yorself
and yor family, disbrsements of bank+s shares is one time or as per terms of deal!
Build Your Home: Build Your Home:
Land: 60 bank: 40 customer Land: 60 bank: 40 customer
Construction: 70 bank: 30 customer Construction: 70 bank: 30 customer
Ko have a plot, and need finance to constrct a home, which excites everyone in yor
familyO $o problem! .e will provide yo p 52L:2!constrction of hoseG flat to be
completed with in /1 months from the date of disbrsement of the first tranche!
Renovate Your Home: Renovate Your Home:
'8 to a aEiu of F/G of the >a,ue of !our 8ro8ert! or Rs1 .10 (i,,ion =hi9he>er is
,o=er1
Ko already own a home, bt need extra space for a growing family! ;ne time
disbrsement of bank+s shares!
)et6s Start It TogetherB
)n> Alfallah %sharika Homes> yo enter into a -oint ownership agreement with the
Bank for prchaseG constrctionG renovation andG or replacement of yor otstanding
hosing loans to own a %sharika property, where the bank will provide yo a certain
amont of financing maximm p to 62E of vale of property and sign %sharika
Agreement! Ko also sign a %onthly payment Agreement, to pay rental for the se and
occpation of the %sharika property, and certain amont for the prchase of Bank+s
%sharika nit! (he prchase of %sharika nits by yo shall reslt in (ransfer of (itle
of %sharika 'roperty and yo become the #ole ;wner with a free and clear title to the
property!
All agreements sed for Alfallah %sharika Homes are sharia compliant approved by or
#HA,)A A"P)#;,! 'rchase of %sharika property throgh a -oint ownership
agreement and %sharika agreement and then transferring the title of ownership to the
Cstomer throgh prchase of %sharika Dnits! (his operational mods opendi makes
Alfallah %sharika Homes different from conventional bank+s mortgage loans! Bank
Alfallah participates in the cost of the %sharika property being prchasedG constrctedG
renovated as -oint owner whereas, in mortgages loans from conventional banks, the banks
charge mark&p G interest on the money lent to the cstomer! (he rental charged by Bank
Alfallah is for the se and occpation of bank+s share in the %sharika property!
Documents Documents
(he following docments are re*ired to be sbmitted by an applicant with the
completed application
1) 3 passport size photographs
2) Copy of NIC (new).
3) Copy of co-applicant`s NIC-NEW.
4) Copies of last Salary / Pay Slip duly attested by the HR department.
5) Salary Certificate (original) from the employer, showing the gross salary
and deductions.
6) Copy of paid utility bill.
7) Borrower`s fact sheet.
8) Copy of recent Credit Card Bill
9) Bank Statement for the last SIX months.
Processing charges Processing charges
Ko will be re*ired to deposit processing fee in the branch according to schedle given
below0
Processing charges: p to ,s 1!2 %illion& ,s!4, 222
Dp to ,s4!2 %illion&,s! /2,222
Dp to ,s! 5!4 %illion& ,s!/4, 222
Dp to ,s! /2!2 %illion& ,s! 12,222
Lets Look Ahead Towards a Brighter Future Together 1:
(he processing charges shall be non refndable!
Frthermore, yo will have to bear the actal stamp fee, registration fee and other
incidental charges re*ired for registration of varios agreementsG %ortgage deedG
irrevocable power of attorney etc!
%eterination of BA)<IB%Hs share rent
BAA&)B"Qs share of monthly payment of rent shall initially be calclated as nderL
Monthly rent ` AL-IBD`s invest in property/ total value of property BAL-IBD`s
share in monthly rent
(usharika 'nit
BAA&)B"+s total %sharika investment G nmber of months allowed R cost of one
%sharika nit
)ate *a!ent $hargesB
$o we never encorage Cstomers to delay the monthly payment As far as the )slamic
point of view, we can not charge any penalty on the late payment bt to avoid late
payment, charge certain amont according to yor ndertaking in %onthly 'ayment
Agreement! (his amont shall be tilized by BAA&)B" on behalf of cstomer for Charity
prposes in line with #haria 'rinciples!
!The Eligibility Criteria The Eligibility Criteria
Ko are a 'akistani $ational
)f yor age is between 14 and 74 years!
)f yo are in continos employment for 1 years or more!
! )f yo have been a Bank Alfalah borrower for past one year with clean payment
record!
Ko can apply for minimm of 2: years and a maximm period of 12 years!
%aximm financing p to ,s!/2 %illion or three times of gross annal income of
the main cstomer pls /!4 times of gross annal income of the spose, whichever
is less!
)f yo have : years Bor moreC of bsiness or professional experience!
)f yor gross annal income is ,sL 122,222G S or more TKor spose+s income Bp
to 42EC can also be combined with yorsU!
)f yo re*ire a financing of at least ,sL 422,222G& or more Bmaximm ,sL
5,422,222G&C!
)f yo are eligible and provide the re*ired informationG docmentation, we will take
maximm of : to 9 weeks for approval depending on the amont of facility!
10 Steps to Arranging Your Bank Alfalah Home Financing 10 Steps to Arranging Your Bank Alfalah Home Financing
/! .e provide yo with all the information yo need abot Bank Alfalah Home
%sharika! (his can be throgh a face&to&face meeting with or ,elationship
;fficer, or over the telephone, or throgh the post!
1! Ko give s some basic information abot yor income and the amont yo need
so that we can give yo an agreement in principle!
:! ;nce yo have decided on the amont yo want, yo complete an application
form and pass it on to s, together with the re*ired docments!
9! .e make some in*iries abot yor financial circmstances!
4! .e carryot a valation of the property and verification of yor income!
7! ;nce we have carried ot all the initial processing, we send yo or offer throgh
a =Facility Advice Aetter>!
5! Ko sign the Facility Advice Aetter and retrn it to s!
6! ;r "ocmentation Control Center will get in toch with yo to complete
Finance ? #ecrity docmentation inclding legal opinion on the title docments
of the property and also the insrances!
8! Ko sign the Finance Agreement and Charge docments!
/2! ;r legal advisor will accompany yo to the ,egistrar+s office on the
appointed date with or che*e against the financing for conveyancing of the
property and yor home finance begins!
BANK G'ARANT##S BANK G'ARANT##S
Bank Alfallah )slamic Banking offers following types of Bank 3aranteesL
Bid bond
'erformance bond
,etention money garantee
Contract 3arantee
Advance payment 3arantee
"eferred payment 3arantee
3arantee Favoring Corts
3arantee #ecring 3as Connections
Back to Back 3arantee
#hipping 3arantee
Container 3arantee
3arantee Favoring Collector of Cstomer
Financial 3arantee
Bank Alfallah )slamic Banking shall also isse garantees secring financing
facilities to be availed from )slamic Banks and or Conventional Bank+s branches
operation nder )slamic modes of financing!
('RABAHA FINAN$# ('RABAHA FINAN$#
%orabaha is a particlar kind of sale where the seller Bi!e! the bankC expressly mentions
the cost of the sold commodity ha has incrred, and sells it to another person Bi!e! the
CstomerC by adding some profit thereon! (hs morabaha is not the loan given on
interest, it is the sale of commodity for cashGdeferred price! (his is a mode of sale and
prchase of commodities! (he agreement is made between the Bank and a Cstomer,
whereby Bank prchases a commodity and sells the same to Cstomer on a deferred
payment basis! )n other words, a contract between a bank and a cstomer nder which
the cstomer first prchase certain goods G commodities G assets as an agent of bank and
bank after taking possession of the goods G commodities G assets sells it to the same
cstomer by adding certain profit margin to its cost!
('RABAHA SA)# *RI$#
CostV Expenses incrred V Agreed profit
(O%# OF *AY(#NT
)mmediately in cash
;n mtally agreed ftre date
#pot %rabaha
"eferred #ale %rabaha
TY*#S OF ('RABAHA
C)o9a, 8ur9haseD
%rabaha for prchase of locally available goods G commodities on defer payment basis!
)t can be lmp sm and or in installments!
I8orted goods ? 9oodities ? Assets
%rabaha for prchase of locally available goods G commodities G assets is allowed on the
following basisL
aC #pot %rabaha
bC "eferred 'ayment %rabaha Blmp smG installmentsC
o 'ledge of imported goodsG commodities
o (rst receipt
$O((ON F#AT'R#S $O((ON F#AT'R#S
,e*est from cstomer for prchase of specific goods G
commodities!
Appointment of cstomer as an agent of bank
(he bank takes the possession of goods G commodities and
established its ownership
Cstomer offers the prchase the same goods G commodities
from the bank at a specific price to be paid on some ftre date!
Bank accepts cstomer+s offer to prchase the goods G
commodities and %rabaha docments are signed
All associated costs G charges to be incrred preG post %rabaha
exection, to be determined, calclated earlier and inclded in
%rabaha price!
)n case of )mport %rabaha , cstomer dties by the bank shall
be part of %rabaha price
Appropriate collateral G secrities can be obtained as per mtal
consent!
$'STO(#R6S G'I%AN$#
1. %rabaha is always allowed for Fresh 'rchases!
2. 3oods shall not be sed by the cstomer before %rabaha offer and
acceptance are signed
3. ,oll over in %rabaha is not allowed! However, fresh prchases can be
made nder new mrabaha arrangements
4. %rabaha price one fixed can not be changed!
)n the late payment cstomer have to pay certain amont in charity fnd
according to his ndertaking in %rabaha agreement!
F'N$TIONING OF BANK A)FA))AH IS %I4I%#% F'N$TIONING OF BANK A)FA))AH IS %I4I%#%
INTO FO))O7ING %#*ART(#NTS INTO FO))O7ING %#*ART(#NTS
OPERATION DEPARTMENT
FOREIGN EXCHANGE DEPARTMENT
CREDIT ADMINISTRATION DEPARTMENT
CORPORATE DEPARTMENT
CONSUMER FINANCE DEPARTMENT
O*#RATIONS %#*ART(#NTS O*#RATIONS %#*ART(#NTS
;peration "epartment has following segmentsL
a) Cash
b) Clearing
c) Remittance
d) Account opening
e) Accounts department
Operation Departments Operation Departments
;perations department of the Bank Alfalah Aimited is responsible for the overall
operations of the bank! %r!Faisal $oman B;p+s %anagerC is responsible for all fnction
nder operation department!
(he detail of those departments, which are controlled nder this department, is as nder!
a) Account opening
b) Cash department
c) Clearing
d) Remittances
e) Fixed Deposits:
1. Term Deposit.
2. Call deposit.
3. NDR.
A$$O'NT O*#NING %#*ART(#NT A$$O'NT O*#NING %#*ART(#NT
)t is most important department of bank and its ma-or sorce of income for bank!
%s!Hmera operation officers deal in this department! Following procedre is adopted
for this prpose!
Procedure of Account Opening Procedure of Account Opening
@st fill in the Accont ;pening Form, bring in yor original )dentity Card, and get
introdced by an existing banker! (his is all that yo need to open a #aving Accont with
s and en-oy or personalized banking services!
)t is very simple and *ick procedre! A person who wants to open an accont mst have
the introdction of bank+s staff or any already existing accont holder of the bank! (he
cstomer is re*ired to fill an accont opening form! (hen signatres of the introdce are
verified from #!#! Card Bsignatre specimenC before opening accont! A;F is very
standard and p to the mark which contains almost whole information abot cstomers!
Cstomer is gide to fill all colmns of A;F! All formalities and re*irements are
completed and verified, and all spportive docments are taken and checked according to
the natre of accont! )f any formality is incomplete, che*ebook is not issed ntil it is
flfilled!
)f a person cannot sign write his G her hand thmb impression is affixed marked, which is
attested by one male or two female witnesses! (hmb impression for female right hand
and for male left hand!
Accont nmber is allotted to the cstomer and all particlar sch as natre of accont,
opening date, initial deposit, title of acconts are written in register!
Accont is opened in the system BBank ExcelC by ptting all the particlars of the
cstomers in the system! #!#! cards are handed over to in charge of operations department
for record and verification! (he letter of thanks is sent to cstomer for confirmation of
address and other particlars of cstomer and one copy is attached to A;F! After
complete procedres finally the manager of bank signs the A;F and these forms are filed
in a proper se*ence!
(hey also have to give identity letter
1) NIC copies
Lets Look Ahead Towards a Brighter Future Together :2
2) Passport size photograph
;ne place on the form other is on ## Card they have non&bearer che*es! ;n their
che*e book a stamp is affixed on it there is written! (hmb impression shold be fixed
in front of an officer of the bank!
Che*e book re*est forward by fax to the head office and che*e books will received
after one day and derived to the cstomer on the desk by taking their signatre or if some
one else want to take on the behalf of accont holder he mst have to show initial deposit
slip and give )" card photo copy!
(he bank does not make payment of a che*e bearing a six months or older date! )f an
accont is not operated in six months! )t is called dormant accont!
Types of Accounts Types of Accounts
(he bank different types of acconts exist!
1) INDIVIDUAL ACCOUNT
Any individal or proprietor of bsiness can open an individal accont at BAF!
'A# Bprofit and loss sharingC saving acconts can be opened with the minimm balance
,s! /2,222G&! Following re*irements has to be flfilled for this accont!
#ignatre of cstomer on back of A;F!
%ention next of kin BnomineeC
$ame and AGC W of introdcer!
Perified sign of introdcer!
Cstomer signatre admitted by officer!
$!)!C photocopy attached!
Aetter of thanks!
2) 1OINT ACCOUNT
.hen different people want to or need to share a single accont it is called -oint accont!
(he names of persons are written on the title of AGC and on #!#! card!
#ingle person cannot open -oint AGC! Both persons have to sign on che*e! .hen two or
more person neither partner nor trstee open accont in their name is -oint accont!
Requirements Requirements
#ign of both cstomers on back of A;F
Lets Look Ahead Towards a Brighter Future Together :/
#ign on -oint AGC W mandate
$ame and AGC W of introdcer
$)C copies of both members!
%ode of operation!
3) BUSINESS ACCOUNTS
.hen the owner of the firm operating singly, open an in his term name!
I) SOLE OF PROPRIETOR ACCOUNT
(his accont is for those person who has his own bsiness and he mst be the solely
owner of the bsiness!
Companies stamp
"eclaration of proportion companies+ letterhead!
#ign on A;F!
$)C copy
Perified signatre of introdcer!
#ole proprietorship declaration
II) PARTNERSHIP ACCOUNT
Accont title will be the name of the partnership firm!
#ign of cstomers on back of A;F!
$)C copies of partners
'artnership deed Bcertified copyC dly attested by notary repblic!
'artnership mandate Bprescribed formatC
Companies rbber stamp
(he AGC is opened in the firm name and all partners designate one or two persons to act
behalf of the partnership firm all acts of the firm -ointly and severely!
III) LIMITED COMPANY
Limited Co:
1) Private Limited
2) Public Limited
PRIVATE LIMITED PRIVATE LIMITED
,estrain on companies letterhead dlly attested by chairman!
#ing of all directors on back of A;F!
$)C copies of all directors!
Aist of directors on companies+ letterhead!
Aist of memorandm and article of association!
Copy of board resoltion!
Aatest form 18 Bif director is to be changed or in case of his death, this kind of
form is filled, it incldes information that a new director has how mch nmber of
shares with him!
Companies+ rbber stamp!
"irector shold attest copy of certificate of incorporation0 co register an office
stamp shold be affix!
PUBLIC LIMITED PUBLIC LIMITED
/C Certificate of commencement of bsiness
1C #ame as home docments!
Club / Society / Association Club / Society / Association
(hese concerns are non&trading in natre! (hey have their own rles and reglation and
their affairs are mentioned by the committee called as a governing body or managing
committee!
/C #tamp of directors
1C $)C copies
:C Certified copy of resoltion
9C %emorandm and article of association
4C Aist of heads on companies+ letterhead!
7C Bank accont opened in their name with BAA!
Lets Look Ahead Towards a Brighter Future Together ::
5C $ame of person to be specified for the operation in accont!
6C (he manner in which the accont shall be operated!
8C Aetter of registration!
Cheque Book Issuance Cheque Book Issuance
.hen the accont is opened, then the cstomer is given a che*ebook to sign pon and to
cash money! )t proceeded as nder!
Procedure Procedure
All the accont opening formalities mst be completed before issance of che*ebook!
'articlars of the che*ebook re*isition shold be completed containingL
1. Account Opening Form
2. Introduction
3. Specimen Signature Card
4. Requisition slip
5. Know Your Customer Form
6. Account Number
7. Depositing of amount in account
8. Issuance of a Cheque Book
9. Entry of Cheque Book
10. Filing of AOF
Che*ebook is delivered to the cstomer and his signatre on the che*ebook issance
register! Che*ebook serial nmber entered! )n the system BFox'roC! #tock of
che*ebook are balanced at the end of each day and kept nder safe cstody!
Earlier the banks were charging a fee for issance of che*ebook bt now whenever a
new accont is opened, the accont holder issed a che*ebook free of charge!
Bank Alfalah isses the following che*ebooks!
#aving accont&14 leaves
Crrent accont 42 to /22 leaves!
Crrent accont X 14 leaves
Foreign crrency Y /2 leaves
Foreign crrency /2 leaves
Aoose che*es are also issed in some cases! $mber of leaves can be increased on the
re*est p to /22 leaves!
RECEIVING INWARD CHEQUES
Another responsibility ?fnction of Accont ;pening "epartment is to receive )nward
che*es for collection of other banks! (hese che*es are sent to clearing official who
clears these che*es at #B' from other banks!
#4#RY %AY *OSTING
At the end of each day, 'osting of che*e books is performed! (he accont opening
department makes credit vochers of excise dty and provincial tax on che*ebook
leaves, and posts it in the company!
$)OSING OF A$$O'NT $)OSING OF A$$O'NT
.hen a cstomer wants to close an accont he has to given a hand written application to
the head of the operations department to close his accont pls remaining leaves of
che*e book!
(he manager first verifies the sign of accont holder, and then closing is done from the
registers on the compter where the accont was opened! )n the file of the accont holder
his accont opening form is crossed! For this closing a fee of ,s! /42G& is charge in BAF!
CD,,E$( ACC;D$(#
Crrent deposits are those which are payable to bank whenever demanded by the
cstomer! Bank does not pay any profit on crrent deposits! (here are of different
scheme of saving deposits, which are classified nder different dration prpose and rate
of interest! Fixed deposits are those deposits which are by the bank nder the conditions
that they will not be payable on demand bt will be payable nder fixed or determinable
ftre time date!
FEATURES
A sm of ,s! 422GR in cash as initial deposit is re*ired for opening a crrent accont and
the same may be maintained as minimm average rnning credit balance! $o profit will
be paid on credit balances held in crrent acconts! (he bank reserves the right to allow
opening of crrent aGc at its description! All deposits and withdrawal from a crrent aGc
will take place only at the branch where the accont is being maintained! Crrent aGc
cannot be overdrawn, except by prior agreed agreements with the bank! (he
correspondence relating to crrent AGCs shold be addressed to manager of the branch
where the accont is being maintained! A distinctive nmber will be allotted to each
crrent accont and shall be *oted on all correspondence relating to the respective
accont and at the time of making deposits and withdraws!
(he accont holder can draw sms from his accont by means of che*e spplied to him
by the bank for that particlar accont! Accont holder shold take well care of the
che*ebooks issed to them! (he accont holder will pay excise dty of ,s!9 per leaf to
the government!
PAY-IN SLIP
(his slip is sed for depositing the additional amont! (he bank will accept the
'akistanis notes! All che*es and other instrments shold be crossed before they are
deposited for credit into the accont! (here shall be no restriction on nmber of
withdrawals in crrent accont! (he accont holder is expected to maintain a minimm
rnning credit balance of ,s!422G! An accont holder wishing to close his accont mst
srrender the nsed che*es to the bank! (he crrent accont is compterized, ths it
generate the statement of accont for all accont holders periodically! )ncidental charges
are beard by the accont holder if its credit balance is less than ,s!422G! #ervice charges
of ,#! 12GR will be taken by the bank, if an accont is closed within 7 months from the
date of its opening!
FINANCIAL PRODUCTS
SAVING ACCOUNT
#aving acconts are opened on proper introdction with sms of credit balance within
certain limit for individal Bsingle, -ointC instittions, companies, edcational instittions
etc! ABA has introdced varios schemes nder saving aGc are followingL
Mala Maal Scheme
PLS Account
Saving 365 Account
Capital growth certificate scheme
Fund Management Scheme
Khanm Bachat Scheme
Khushali Bachat Account
Term/ Fixed Deposits
PROFIT & LOSS SHARING (PLS) ACCOUNT
(his accont was started in /862s after the issing of banking ordinance in /862 by Jia
3overnment to develop )slamic banking in 'akistan! )n this case cstomer wold be
responsible for bearing profit as well as loss! (he bank wold be within its rights to
make investment of credit balances in the 'A# saving acconts in any manner at its sole
discretion and to make se of the fnd to the best of its -dgment in the banking bsiness
nder the 'A# system! For withdrawal of larger amont, 5 days notice in writing is
re*ired to be givenL
%inimm balance is ,s!422GR
Below minimm balance charges will be debited
$ot more than eight withdrawals in a year allowed
%ore than ,s!/4222GR are not allowed to draw
#even day notice is re*ired for withdrawal
'rofit calclated on monthly basis
'rofit paid on annally basis
'rofit paid on lowest balance at the end
/2E .ithholding (ax on minimm balance
Jakat dedcted on Z 1!4E

SAVING 365 ACCOUNTS
(his accont is newly developed of ABA and it provides flexibility of saving accont to
bsiness people! 'rofit on deposits will be payable on daily prodct basis on balance of
,#! 422,222G& and above! However, if balance in the accont falls below ,#! 422,222G&
on any day, the prodct will be ignored! (here will be no restriction on withdrawal from
the accont! Jakat and withholding (ax is also applicable on the accont opened nder
this scheme!
%inimm balance is ,s!422,222GR
Below minimm balance, profit calclation ignored
'rofit calclated on daily basis
'rofit paid on annally basis
CA')(AA 3,;.(H CE,()F)CA(E #CHE%E
Aong term deposit
'rofit rate as that of 'A# #aving Accont
%inimm amont of deposit is ,s! /2,222GR
Amont deposited doble in of 4 years
$o maximm limit of "eposits
(E,% "E';#)(#
(erm deposits are fixation of certain amont of money for a specific span of time! (hese
can be of ma-or two types i!e! short term notice deposits and long term notice deposits!
"ifferent rates are charged for different period of times like as shown by following table!
)f presented before matrity then previos period rate wold be charged!
Duration Duration Rate of interest Rate of interest
2/ month 08.1
21 month 10.1
2: month 11.0
27 month 11.5
2/ year 1!.5
21 year 1"."
2: year 14.5
24 year 1#.4
(he instrment term deposit is like a slip containing issing bank name, aGc W to operate
on compter, deal W, cstomer name, reference W, date of isse, amont, rate matrity date
etc!
CALL DEPOSITS
(hese call deposits are presented in the bidding process as garantee or secrity from the
bank that this mch money is deposited in the bank! (hese are made in the favor the party
offering contract or any other person! (he bank offer no interest rate on it becase these
can be called at any time! For encashment the applicant mst have to cancelled the call
deposit instrment from its beneficiary! For collection the beneficiary sally send the
athority letter for paying in the shape of "emand "raft or pay order! (he call deposit
instrment containing the information regarding applicant and beneficiary name, -oint
name aGc opened signatre cards for encashment, reference W, amont, date of isse,
athorized signatre etc!
$ASH %#*ART(#NT $ASH %#*ART(#NT
Cash department of Bank Alfalah works nder the operation department! (his department
is given the complete responsibility of cash, as reslt of transaction in toch local and
foreign crrencies! )t is also responsible for the book keeping of these transactions and
the safe cstody of cash!
(his department performs the main fnction!
a) Cash receipts
b) Cash payments
Cash Receipts Cash Receipts
)n cash department depositors se deposit slip for depositing the amont into their
acconts! (he officer checks if the deposit slip is properly filled p containing title of
accont, AGC nmber, date and amont in words and figres! "etail on both conter file
and cash receipt vocher shold be the same! Cash receiving officer, after twice conted
and matched with the deposit slips will handover cash to the cstomer! (he cash details
are written on the back of the deposit slip and are also entered in cash receiving register!
Cash received stamp is affixed on the face of the deposit slip along with the signatre of
the cash receiving officer!
"eposit slip and cash receiving register is given to the officer in the cash department! (he
officer cash department both on cash receipt and cash receiving register do again proper
checking! ;fficer cash department signs both the deposit slip and register! "eposit slip is
credited and posted in the concerned acconted in the system! Conter folio is given the
deposition as receipt! ;ne consolidated cash debit vocher is posted in the system to
balance the cash!
Cheque Encashment Section:
(he process of che*e encashment is done with the help of the following procedre!
1. Receiving Cheques
2. Verification of signatures
3. Computer terminal process
4. Payment of cash
*ro9edure *ro9edure
%r! .a*ar ? )khla* deals with cash payments the process for payment of che*e local
and foreign crrency is same! First the che*e is presented by the cstomer or holder to
cash payment officer! He confirms that it is drawn on the same branch and the particlars
of che*e are properly filled in! one signatre of the holder is taken on the back of the
che*e! Che*e is handed over to the officer cash department for scrtiny where officer
checks the date, amont in words and amont in material figres, payee+s name, crossing
if any, accont nmber, che*e serial nmber, any alterations G endorsements and
signatre of the cstomer! Accont is debited and then the officer cancels che*e! )t is
posted in the system and posting stamp and nmber is affixed on it! Che*e is handed
over to the cash payment officer for payment! ;ne more signatre on that back of the
che*e is taken from the holder to match with the first one, and then cash is paid to the
cash detail is written on the back of the che*e! Cash paid stamp is affixed on the face of
the che*e! Entry is passed in the cash payment register and system!
$)#ARING %#*ART(#NT $)#ARING %#*ART(#NT
%r!,aza deals this department! Before discssing it is necessary to know what is
=clearing>!
=(he process by which che*e exchanged between the collecting and paying bank and
the ensing financial settlement is called =clearing>! (his facility is provided by the state
bank of 'akistan for offsetting of cross obligations between the different banks! Clearing
is of two types!
1) Inward clearing
2) Outward clearing
Inward Clearing Inward Clearing
.hen che*e drafts, etc, of or branch presented to s for clearing by the #B'! Che*e to
be honored by bank!
Outward Clearing Outward Clearing
(he che*e of other banks, which the accont holder deposit in their acconts is, sends
for collection!
$)#ARING *RO$#SS CIN7AR%?O'T7AR%D $)#ARING *RO$#SS CIN7AR%?O'T7AR%D
Here the local che*es are received that are drawn on BAF! All the che*es are received
on one conter along with the paying slips dly filled in properly containing particlars
of che*e and accont holder! Conter folio of paying slip is handed over to the cstomer
by ptting stamp for che*e received for collection for Bank Alfalah on it dly signed by
officer! (hese che*es are scrtinized and che*es for local clearing are separated from
;BCs! (hese are then entered in clearing register and che*es for collecting are entered
in ;BC register and handed over the bills department of collection! Clearing officer
checks and verifies title of all the che*es deposited by the cstomer to confirm the good
title of the che*es! Che*es are scrtinized properly and paying slips are separated from
che*es! #pecial crossing, endorsement and clearing stamps are affixed on the che*es!
Che*es of each bank are sorted and arranged branch wise! All the che*es are then
entered into the clearing system of bank! 'rint ot of the clearing is taken and details are
attached!
.ith the che*es of each bank! "etails of these banks are then entered into the clearing
schedle containing nmber of che*es presented and their total amont against the name
of each bank! (hen total nmber of che*es presented to all banks and their total amont
is written on the foot of that schedle, which is tallied with the clearing register!
$ext morning, these che*es are delivered to the respective banks in clearing hose of
#B' between 8L22 to 8L:2 A%! )n the same manner, other banks present their clearing
drawn on Bank Alfalah! (otal nmber of che*es and their amont delivered to other
banks are received from them are written on the clearing hose schedle and handed over
to the officer clearing hose #B'! Che*es G "" received in clearing are given to the
officer cash department of the branch for their repayment! After ) proper scrtiny of
che*es, verification of signatres and confirmation of balance in the accont, officer
cash department pays these che*e by canceling and posting them in the system!
)f any che*e is not passed de to insfficient balance or any other reason, officer cash
department retrns the same che*e by attaching a che*e retrn memo containing
reason for retrn! (his che*e is entered into the che*e retrned register and bank
charges are dedcted according to the schedle of charges!
#econd clearing is called at 1L:2 '% to check the fate of the che*es presented to other
banks in the morning! )f any che*e is to retrn, that is delivered to the same bank in
second clearing! )n the same manner, if any che*e presented by Bank Alfalah in first
clearing is retrned, they receive it and once again give schedle of clearing figre to the
officer&clearing hose #B' containing nmber of che*es and their amont delivered and
received npaid!
A$$O'NT %#*ART(#NT A$$O'NT %#*ART(#NT
Accont department is the most important department of the bank! Becase it is
concerned withL
Revenue
Expenses
Assets
Liabilities
(hese are the pillars of any bsiness! )n this department, all the vochers that are posted
dring one day are sent to the accont department next day! (hese vochers are already
posted to compter by the concerned department! #o compter also sends a report to the
acconts department! (he acconts department has to tell that the re*irements for
che*es and vochers are flly checked!
)f any kind of renovation or constrction or rebilding is done, all is paid from the
acconts department!
Daily Customer Movements List Daily Customer Movements List
All the changes that are made in acconts of cstomer are shown in the daily cstomer
movement list! By sing this list, people of acconts department can prepare the
vochers!
Accont department performs following activities!
"ata Controlling
,eporting
Expense %anagement
(axation
'ay ,ole
Bdget 'reparation
%onthly closing %onitory ? %onthly Closing #tatement
'reparation
Aeave ,ecord ? 3eneral Administration
Fixed Assets, ,ecord, "epreciation, %aintenance, )nsrance ?
Approvals
Pocher preparation
'reparation of daily, weekly, monthly, and annal statement!
Bdgeting and fixed assts
Employer+s benefit
Expenditre approval!
(he bank does not make payment of a che*e bearing a six&month or older date! )f an
accont is not operated in six months, it is called dormant accont!
In Account Department Function Are Performed In 3 Steps In Account Department Function Are Performed In 3 Steps
Data controlling
Payment/disbursement/payroll system.
Reporting system
)n "ata controlling, vochers are received from every department like Accont ;pening,
Car&Financing, Cash dept, credit card section etc and then sorting will start and sorting by
two ways
1) By Customer Activities.
2) By General Ledger
After sorting sb&sorting will start and this can also be done in two ways
1) By A/C title (current, saving, royal group, royal profit etc)
2) By Computer codes (01,02,05,019,12,029)
)n disbrsement and payment fnction they perform )BCA+s and preparing cash payment
Pochers ? pay slips etc!
)n reporting different types of reports are prepared, stored in folders or mailed to head
offices! (here are 7 basic reports on "aily basis!
/! "aily Branch 'osition! B(reasryC
1! "aily "eposit ? Advances 'osition!
:! "aily %anagement )nformation #ystem!
9! "aily Foreign Crrency ,eport!
4! "aily fnd ,pee position!
7! #tatement of Affairs!
Weekly Reports Weekly Reports
1. Weekly FE-25.
2. Advances & Deposit Statements.
"eposits can be categorized as followsL
1. Call Deposits
"epending on local practice Call "eposits are to be repaid immediately pon demand and
dring conter hors!
2. Notice Deposits
$otice deposits are kind of fixed deposits! (he minimm balance re*irement for
opening the accont is ,s! 422G& and payment is drawn on matrity of the specific period!
TY*#S OF A$$O'NT TY*#S OF A$$O'NT
Riba Free - Current Account
Saving account
Riba Free - Dollar Saving Account
Riba Free - Rupee Saving Account
Riba Free Karobare Munafa Account
Current Account Current Account
A bank accont that is ideal for bsinesses and individals looking for #hariah compliant
banking and ease of access! .ith a minimm amont of only ,s!/2, 222G& yo can open a
,iba&Free Crrent Accont! ;ffering yo a range of benefits inclding free online
transactions, no restrictions on the nmber of transactions, Call Center facilities, balance
certificates, priority banking and mch more!
Saving Account Saving Account
A ni*e bank accont that offers the opportnity to earn Halal profits, while en-oying a
range of added benefits! )t can be opened with a minimm amont of only ,s!/2, 222!
(he profit on this accont is calclated and paid on a monthly basis, and comes with a
variety of free benefits inclding personalized check books, no restrictions on
transactions, priority banking and so on!
Riba Free - Dollar Saving Account Riba Free - Dollar Saving Account
.ith a minimm deposit re*irement of only D#Y/22, the dollar saving accont is nder
a %darabah arrangement that is strictly in conformity with the principles of )slamic
#hariah! 'rofit on this accont is also paid on a monthly basis and comes with a range of
benefits inclding checking facility, balance certificates, and personal financial
consltancy services!
Riba Free - Riba Free - Rupee Saving Account Rupee Saving Account
A ni*e bank accont that offers the opportnity to earn Halal profits, while en-oying a
range of added benefits! )t can be opened with a minimm amont of only ,s!/2,
222! (he profit on this accont is calclated and paid on a monthly basis, and comes
with a variety of free benefits inclding personalized check books, no restrictions on
transactions, priority banking and so on!
Riba Free Karobare Munafa Account Riba Free Karobare Munafa Account
<arobari %nafa is a savings accont specifically tailored for large Corporate or 3;'
controlled entities! )t allows cstomers to earn higher retrns on srpls cash
balances! )t has no preset transaction limits and comes with a variety of free
packaged benefits!
R#(ITTAN$# %#*ART(#NT R#(ITTAN$# %#*ART(#NT
(he need of remittance is commonly felt in today+s bsiness! A ma-or fnction of any
bank is to =transfer of fnds form one place to another>! Bank Alfalah ses the following
modes of transfer of fnds!
a) Demand draft (DD)
b) Telegraphic Transfer (TT)
c) Pay order (PO)
d) Call deposit
e) Pay slip
f) Money gram
Demand Draft Demand Draft
)t is instrment, which is sed to transfer amont from one city to another city it can be
made on cash as well as on che*e! )f it is made throgh che*e that it is necessary that
person mst be AGc accont holder while in case of cash any person can make! (he
demand draft is secred mode of payment! )t consists of three copies!
/C ;riginal copy, which is given to accont holder!
1C "" advice is sent to the central branch!
:C (hird copy is for reconciliation! )ts photocopy is kept with s BbankC while
original is sent to head office for reconciliation!
Parties Involved in DD:
'rchaser
)ssing Branch
"rawee Branch
"" is of following two typesL
DD payable
DD Paid Suspense a/c
)n the first type as advice reaches for payment the immediately pay to the cstomer while
in later as "" presented by the cstomer, it is paid and the sspense accont is debited!
Procedure Procedure
(he client who wants to transfer his fnds form one city to another fills a form re*esting
the bank to prepare a ""! "" application form contains colmns re*iring information
for the preparations of "" e!*!
Beneficiary name
Applicant`s name
Address
Amount to be sent etc.
Bank dedcts some charges against ""!
Telegraphic Transfer Telegraphic Transfer
)t is another mode of transfer of fnds! )t is *ickest mode of transfer of fnds from one
city to another! For ((, client has to sbmit the application on a prescribed form of the
bank! Client can deposit money in to the bank or can re*est the bank to dedct the
amont against the (( along with the charges against the issance of (( from his
accont! (he charges against the issance of (( charged by Bank Alfalah!
Procedure for Telegraphic Transfer Issuance Procedure for Telegraphic Transfer Issuance
Application form is given to the cstomer to fill! (wo signatres are taken on the form
one for re*est and other for receiving the instrment! All the particlars of application
form are checked and bank commission charges and with holding tax are written on the
top of the applicant form! )f the cstomer is maintaining his accont with the branch he
can give che*e for total amont of instrment pls bank charges! Che*e and
application form is then given to the officer cash department for the payment of the
che*e! After proper scrtiny, officer cash department posts whom che*e and signs the
application form to assre that payment is received! )f the cstomer wants to pay cash,
the cstomer on cash conter deposits it! Cash receiving officer receives cash on the
application form along with the bank charges and withholding tax0 application form is
then given to the remittances in charge for issance of the instrment! He enters all the
particlars of the application form in the system BB'3C and compter gives an Ato
Control $mber to the (!( message of receiving branch! (his message is then sent
throgh telex to the receiving branch followed by a (!(! advice! (he cstomer is
confirmed that (!(! has been sent!
$O))#$TION $O))#$TION
All the che*es nder collection are called che*es nder collection in Bank Alfalah
Aimited! (here are two types of bills for collectionL
Outward Bills for Collection
Inward Bills for Collection
Pay Order Pay Order
.ritten order which is issed and received to the save book or drawn or payable on same
branch! Application form is given to the cstomer to fill! (wo signatres are taken on the
form one for re*est and other for receiving the instrment! All the particlars of
application form are checked and bank commission charges and with holding tax are
written on the top of the applicant form! )f the cstomer is maintaining his accont with
the branch he can give che*e for total amont of instrment pls bank charges! Che*e
and application form is then given to the officer cash department for the payment post the
che*e and signs the application form in token of payment received! )f the cstomer
wants to pay cash, cash is deposited by the cstomer on cash conter cash receiving
officer receives, cash on the application form along with the bank charges and
withholding tax! Application form is given to the remittances in charge for issance of
instrment! He enters all the particlars of the application form in the system BB'3C and
compter gives an ato control nmber to the instrment! 'rint ot a take on the block
payment order! (wo athorized officers of the branch then sign it! )nstrment is the
protect graphed and given to the cstomers! .hen the instrment is presented for
payment, it is posted in the B'3 and canceled by the remittances in charge after proper
scrtiny!
Call Deposit Call Deposit
.hen the party wants to give payment from itself to another party then it makes call
deposit! (he bank keeps it with itself nless it does not receive instrctions from other
bank! $ormally it is made on cash and goes in party accont!
Pay Slip Pay Slip
)t is sed when bank itself pay for any type of transaction e!g! prchased of stationary!
Money Gram Money Gram
Bank Alfalah Aimited, in collaboration with money gram offer remittance services to
'akistan! =)t+s basically a person to person money transfer service that allows consmer
to receive money in -st a few mintes!>
Procedure Procedure
'erson mst have reference no!
'erson mst tell reference no! And compte the simple form!
'erson has to show $)C and tell compte introdction after that he can obtain
money!
Pochers are also posted in the system! .hen ;BC is realized collection bank pays the
amont throgh )BCA if it is the same bank or throgh "" if it is another bank! )f "" is
received against ;BC, it is presented in the clearing for collection! )f )BCA is received
the branch for the payment of ;BC, certain vochers are posted in the system!
FOR#IGN #5$HANG# %#*ART(#NT FOR#IGN #5$HANG# %#*ART(#NT
=(he transfer of credits to a foreign contry to settle debts or acconts between resident
of home contry and those of the foreign contry> or =the foreign bills crrencies etc
sed to settle sch acconts>!
Foreign exchanged department deals within exports and imports! (he bank acts as
exporter as well as importer bank for different parties who are in the bsiness of export
and import!
Imports Imports
Letter of Credits
All Aetter of Credit transactions are handled in accordance with the Dniform Cstoms
and 'ractice for "ocmentary Credits as pblished time to time by the )nternational
Chamber of Commerce! (he vast network of or correspondents connected throgh
#.)F( ensres speedy processing of AC transactions!
Import Murabaha Finance
(o facilitate the financing re*irements of imports, we offer ,iba free, )mport %rabaha
Facility! (his prodct is approved by or #haria Advisor as tre alternative of
conventional modes!
Other services
! .e offer fll range of services related to imports e!g! Contract ,egistration, )mport Bills
for Collection, #hipping 3arantees and Advance 'ayments against )mports nder
gidelines of foreign Exchange %anal!
Export Export
All goods and services sent from one contry to another contry!
Export Murabaha Finance
)n order to facilitate the prodction G manfactring of goods for onward export to
international markets, we offer Export %rabaha Finance completely ,iba Free for or
exporters!
SBP Islamic Export Finance Scheme
.e also offer #B' )slamic Export Finance nder 'art ) ? )) on %rabaha basis in line
with the #haria principles!
Other services
.e offer all export related services i!e! Collection of export bills, $egotiation nder #ight
Acs, AdvisingG confirmation G (ransfer of Aetter of Credits opened by other banks!
Document Required For Exporter Document Required For Exporter
1) National tax number
2) Registration with EPB
3) Sales tax registration
Documents to Be Attached For Exporters
)nvoice
Bill of lading
'acking list
(otal *antity
$et weight G carton
3ross weight G carton
(otal net weight G carton
(otal gross weight
Bill of exchange Boriginal or draftC
E&formL )nitial docment on which total export proceeding is based! )n this form,
all the conditions are given, which are necessary for exports!
Aetter of creditL )t is written agreement between importer and exporter!
Beneficiary certificate!
"HA certificate B(C# certificateC
Form Q%+
Certificate of ;rigin BForm X AC
Payment from Importer Bank Payment from Importer Bank
)t is the choice of importer to open AGC from any bank and the bank from which AGC is
opened can also refer to some other bank for payment! #o bill of exchange is sent to refer
bank and other docments are sent to AGC opening bank!
SWIFT (Standard World Wide Inter Bank Financial Transaction) SWIFT (Standard World Wide Inter Bank Financial Transaction)
)t is network among all banks! $o other institte can get involved in it!
Bill Of Lading Bill Of Lading
Certificate from shipping company for loading commodities! )f re*irement of AGC is to
isse bill of lading in favor of AGC opening bank, then athorized dealer certificate will be
provided by bank in favor of AGC opening bank!
Bank Keep In Record Bank Keep In Record
Covering schedle
)nvoice
'acking list
A.B
Certificate of origin
E&form
$ormally bank keeps photocopy of all docments in record!

%O$'(#NTARY $R#%IT %O$'(#NTARY $R#%IT
DC Department DC Department
Alfalah Bank has his fll&fledged docmentary credit department!
As a credit instrment and as a means of making as a payment the docmentary credit is
an essential instrment for condcting word trade today! A docmentary credit represents
a commitment bank to pay the seller of goods or services a certain amont provided
present stiplated docments evidencing the shipment of the goods with prescribed
period of time!
For imports or exports first the parties have to do pon a sale contract regarding the term
and condition of sale! ;ne mode of payment is by AGC, which is secred, and now days
mostly se the bsiness!
Aetter of credit is nder taking by opening bank B$egotiating bankC that it will make
payment if docments are as per terms of AC!
Four Parties Are Involved In Letter Of Credit Four Parties Are Involved In Letter Of Credit
Applicant Importer
Beneficiary Exporter
Issuing bank Bank of importer
Advising bank Bank of importer
According to import policy, no import is valid with ot import license, which is issed by
the chief controller of import, and export or we can say export promotion brea BE'BC!
Types of L/C:
Aetter of Credit is
/! ,evocable
1! )rrevocable
1. Revocable Letter of Credit:
A revocable Aetter of Credit can be amended or cancelled by the issing bank at any
time withot prior notification to the seller! (his form of credit gives the byer
maximm facility bt it places the seller in difficlt position when the goods are in
transit and the credit is revoked before the docments are presented and payment has
not been made on presentation! #ince it offers little secrity to the seller, it is hardly
sed in foreign trade!
2. Irrevocable Letter of Credit:
An irrevocable letter of Credit constittes a definite ndertaking of the issing bank
to accept and pay the bills drawn pon it so long as the terms and conditions
stiplated in the letter are flfilled!
(his form of credit can be amended or cancelled only with agreement of all parties to
it! #ince it gives the seller greater assrance of payment, it is always preferred to
revocable letter of credit!
Banks involve in Letter of Credit:
Following Banks are involved in letter of creditL
i. Issuing Bank (Opening Bank)
ii. Reimbursing Bank
iii. Advising Bank
iv. Negotiating Bank
v. Intermediary Bank
L/C Opening Procedure L/C Opening Procedure
.hen the importer obtained import license, then the bank will open letter of credit! =A
letter of credit is ndertaking by AC opening bank to pt an agreed sm of money to
sellers+ bank on behalf of the byer of the goods nder clearly defined terms and
conditions>! 'akistani banks open only irrevocable AC! An essential featre of the
irrevocable AC is that it cannot be modified, altered, amended, or canceled withot the
prior consent of all the parties! 'arty comes to the bank and fills the form, which is
provided on the payment of ,s! /22! (his form is filled by the party and is retrn to the
bank, it incldes details like!
Name of company
Address
Country of origin
Branch name
Quantity
Insurance company
Shipment from
Shipment to
;ne thing shold also be sbmitted which is )$"E$(! )f the foreign party has any agent
they will isse the indent with following details!
To Messer
Importers, etc
Document Required for ~LC Opening Document Required for ~LC Opening
.hen the bank opens AC, it re*ires following docments!
Valid import license
Performa invoice
Importer should be Pakistani
Letter of under taking form importer
Insurance cover.
After the AC is opened following entries are made!
LC opening register
Margin / Liability Account Register.
Payment to Seller Payment to Seller
(he negotiating bank pon receiving the docments from the seller checks the docments
according to terms and conditions of credit pon satisfying it self of this the negotiating
bank makes payment to the seller if sight credit! )t then forwards the docments to the
opening bank and reimbrses it self throgh the opening banks accont with itself!
Documents Received By the Opening Bank Documents Received By the Opening Bank
)mporters bank or opening bank receives the following docments form the exporter+s
bank or negotiating bank!
Bill of exchange
Invoices
Bill of lading
Packing list
Certificate of origin
Insurance
$R#%IT A%(INISTRATION %#*ART(#NT $R#%IT A%(INISTRATION %#*ART(#NT
(he credit department as its name implies is basically concerned with the credits
extended to the individals ? instittions! (he credit dept! is considered as the basic
earning nit of the bank! (he overall fnctioning of the credit department covers the
following areasL (he fnctioning of the credit department is again divided into two
departments whose fnctioning is interrelated with each other, which areL
Credit ;peration "epartment!
Credit Administration!
$ow we will take a closer look at the area of fnctioning of each of these departments in
the coming section!
Credit Operation Department
Credit operations department as its name sggest is responsible for the control ?
performance of the operations that comes nder the head of the credit department!
Function of Credit Operations Department
(he fnctions of the credit operations department extend to the following areasL
/! (he fnction of C;" rotates arond the disbrsement and recovery of
%orabahas! All of the morabahas are processed sing a specific procedre,
which is as followsL
i! C;" books the morabaha after receiving the dly approved ,isk
Appraisal Form B,AC or the approval of ;ffering #heet dly
approved by appropriate credit athority!
ii! (he officers dealing the morabaha do not take direct instrction
from the cstomers!
iii! All instrctionsGdocmentations are roted throgh the head of
C;"GCB3!
1! C;" prepares the monthly smmary of the accont detailing balances of
classified cstomers, applicable classifications, forced sale vales of secrities,
overde period, etc! (hese reports are prepared as per the prdential reglations
and sbmitted to the management!
:! C;" also prepares the report as they are needed by the reglatory athorities!
Deal-in Products of COD
ABA crrently offers the following credit facilities to its cstomersL
A. Morabaha- Local Purchase Order (LPO).
B. Morabaha- Trust Receipts (TR).
C. Morabaha- Payment against Documents (PAD).
D. Morabaha- Pledge/FIM.
E. Ijara- Leasing.
F. Musharaka Financing.
G. Morabaha- Export Finance.
H. Car Ijara Financing.
Documents required for approval of facility
Before extending any facility to the cstomers the bank has got some docmentation
re*irements that are to be flfilled by the cstomer! (hese re*irements are almost the
same for all the different types of facilities! (he formalities are given as nderL
i! ,e*est letter!
ii! Board resoltion!
iii! #ignatre of cstomerGpartnersGdirectors!
iv! Pisiting card!
v! $)C card!
vi! %emorandm and article of association!
vii! Certificate of incorporation!
viii! Certificate of commencement of bsiness!
ix! Form 18 BAist of directorsC!
x! )mportGExport registration nmber!
xi! Financial of last three year V Adit report!
Credit Department Functions and Facilities Credit Department Functions and Facilities
Credit means belief or trst! =(he *ality of being credible or trstworthy>! Credit as
=trst in one+s integrity in money matters and ones ability to meet payment when de>!
! (he earnings of BAA are chiefly derived from interest charge and disconts! (his
department is the revene&generating department! Credit department basically has three
segments!
1) Credit marketing department
2) Credit administration department
3) Trade finance services department
Credit and advance department deals with extending loans Bcredit facilityC to cstomers!
#tate Bank of 'akistan B#B'C has prescribed reglations, which are called
=',D"E$()AA ,E3DAA();$#>! Every bank has to follow these reglations! )f any
bank violates the reglations it shold be liable for penalties nder the core spirit of #B'
'A< B,#C!
Commercial Credit Commercial Credit
A commercial Credit facility is the core bsiness area of the Bank! (he types of facilities
being offered to cstomers can be broadly presented as followsL
aC Facilities where the bank actally advances money against ftre repayment &
BIFnded CreditsIC, and
bC Facilities where the bank sbstittes IitsI own credit for that of its cstomer e!g!
opening import Aetters of Credit, issance of bank garantees & BI$on&Fnded CreditsIC
Credit lines mst be defined as to crrency, total amont and time, prpose and the
general or specific conditions pon which they are made available to a cstomer! (he
mark&p andGor commission rates and method of compting shold be specified! (he
agreement shold also provide for defalt rate for delayed payments, nless defalt rate is
waived with the approval of the sanctioning athority!
Following Are the Different Types of Facilities Offered By the Bank Following Are the Different Types of Facilities Offered By the Bank
Fnded Credits $;$&Fnded Credits
a) Crrent Finance aC Aetters of Credit
b) (erm Finance bC 3arantees
c) #yndication G Consortim Financing #hipping 3arantees
d) $egotiations of Export bills nder AGC Bid Bonds
e) 'reshipment Finance B'acking CreditC Advance 'ayment 3arantees
f) )mport Financing 'erformance Bonds
iC Finance Against (rst ,eceipt BF(,C ;thers
iiC Finance Against )mported %erchandise
BF)%C
g) Contract Financing
Current Finance CF Current Finance CF
A facility nder which the bank makes available fnds pto a specific amont at any time
over a specified period of time Bi!e! one yearC is termed as crrent finance! )t allows a
borrower to borrow from time to time, pto the validity period, according to his needs!
(he fnds may be borrowed partially, be repaid and borrowed again pto the amont
established and within the time period allowed nder the agreement!
(his facility is a revolving advance and mark&p is charged only on the tilized part of
the facility! CF facilities are allowed primarily for working capital re*irement and
repayable on demand! )n order to strengthen the control environment all CF acconts
shold be scrtinized by the BrandGCredit %anagers andGor their designates, at least once
every month to!
Term Finance TF Term Finance TF
(erm Finance is sally granted for specific prposes and is fixed as to amont and period!
#ch a loan can be li*idated either by a single repayment of principal and mark&p, in
which case the mark&p is fixed for the period or by means of a repayment schedle in the
case of medim or long term loans!
(F shold be granted at a fixed rate for the tenor of the facility!
Syndication / Consortium Financing Syndication / Consortium Financing
(he preceding paragraph of this section assmes that there is only one bank involved in the
extension of credit facilities! However, especially when large amonts are involved, it is
common for a nmber of banks to take p portions in financing of a pro-ect!
(his becomes necessary, when the amont of credit exceeds the lending limit of the
principal bank as per #B' 'rdential ,eglations! Bank may also participate in sch
activity when it is prdent to spread the risk amongst a nmber of banks! Arrangements in
which a principal lending bank plls its fnd along with one or more other banks, which are
not a party to the original agreement, are called Consortim Agreement! .hen the
borrower deals with more than one bank all of which are party to the credit agreement, it is
called syndication! )n all syndicationsG consortims the bank shold not take a sbordinate
position to other members of the syndicateGparticipants and the secrities shold be shared
on a pari pass basis withot preference or priority of one or more banks!
Negotiation of Export Bills under L/C Negotiation of Export Bills under L/C
Bills under L/Cs will be negotiated only if: Bills under L/Cs will be negotiated only if:
A bank that is a correspondent has established the AGC so that signatreG test can be verified
or issed by a bank whose signatreGtest can be verified with an intermediary bank Bif
presented throgh another bankC and where previos experience in bills negotiation with
that bank has been satisfactory! (he AGC has been established in favor of the beneficiary
who is of good repte and a known credit worthy cstomer of the branch approval from the
Head ;ffice for inter&bank exposre in respect of the transaction is on record!
Finance against Packing and Credit ~FAPC Finance against Packing and Credit ~FAPC
'acking Credit is extended against ftre exports! (he sal reason for advances against
exports is to enable the merchant to by and packGmanfactre merchandise pending
shipment of the goods and negotiation of the relative bills, hence the expression ['acking
Credit[! .hile extending packing credit, the following aspects shold be kept in viewL
Advances shold not be granted to enable a merchant to speclate! (o prevent this, the
merchant shold exhibit and lodge with the bank a Aetter of Credit or other evidence of a
definite order for the goods Be!g! 'rchase orderG firm contract etc!C A Aetter of Credit in
itself is not [secrity[ and it need not even constitte evidence of a firm order! However,
with reliable cstomers a Aetter of Credit assists in deciding whether or not a 'acking
Credit advance shold be given! Care shold be exercised to ensre that the money is sed
for proper prposes! ,eglar scrtiny of the borrowerIs crrent accont is essential and is
sally very sefl! Fre*ent inspections shold be carried ot where the merchandise Braw
materialsGfinished goodsC is stored and brief details recorded in a register! (he inspection
shold be sed to ensre that the borrower is capable of execting the order within the
given time frame! )f not, re*est for extension in the validity of export orderGexport AGC
mst be sbmitted well in advance! )t may be desirable for forward exchange to be booked
when the advance is granted! (he packing credit advance shold be ad-sted from the
proceeds of the export bills!
Finance against Imported Merchandise FIM Finance against Imported Merchandise FIM
(his facility is allowed against the commodities imported from other contries sally
throgh letter of credit! #ome time importer does not have enogh amonts for paying the
imported merchandise therefore! He re*est to the bank to pay all des to the exporter
against the secrity of imported merchandise! Bank pays the amont and releases the
goods, when the importer pays off its liability partially G flly!
Finance against Trust Receipt FATR Finance against Trust Receipt FATR
Finance Against (rst ,eceipts BF(,sC & are related to import transactions and shold be
granted only as a sb&limit of an import AGC line! (he bank may also allow to specific
cstomers F(, facility against collection docments as per the terms set ot by the Head
;ffice from time to time, which are discssed as followsL
FTRs in respect of L/C documents - nder this facility, the Bank is re*ired to deliver
docments of title to goods imported nder AGC, to the cstomer to enable the latter to
obtain goods prior to payment and the cstomer ndertakes to hold the docments! (he
goods represented thereby and the sale proceeds thereof in trst for the bank!
(here are very obvios risks in permitting a cstomer to deal with goods in this way! A
cstomer having in his cstody, goods released to him against a trst receipt can
fradlently sell them or pledge them to a third party, leaving the holder of the trst
receipt only the right to se for breach of trst! F(, facilities shold therefore be granted
to ndobted importers against established credit lines!
)t is important to note that the goods released nder a trst receipt mst be flly insred
by the cstomer and the Bank reserves the right to inspect, repossess and if necessary,
dispose of the goods at anytime!
Finance against Imported Merchandise (FIM) Finance against Imported Merchandise (FIM)
Branches may grant Finance against )mported %erchandise by way of a sb&limit nder a
cstomerIs import credit line! (his facility is sally allowed against imported goods bt
occasionally sch financing may be allowed against locally manfactred goods covered
nder AGCs or received for collection!
Contract Finance Contract Finance
.hen financing contracts, the main concerns by the banks on the contractors+ net worth
are as followsL
iC (he standing of the employer who has to pay the contractor!
iiC (he terms of the contract!
iiC (he contractorIs ability to execte the work properly and within stiplated time
frame!
viC Piability of the *oted price and ade*acy of the financing amont being soght!
vC (he contract is framed to be irrevocable withot the banks consent and is
acknowledged by the employer!
viC ;verall profitability and viability of the contract!
For contracts in excess of ,#! 42!22 %illion a control accont shold be kept for each
contract starting with the contract price and showing variations added and payments
athorized, so that at any time the branch can prodce a statement ofL
Contract price Bas amended by variationsC
.ork completed and paid for
.ork measred and to be paid for
.ork in progress Bnot measredC
,etentions by employer
Balance of contract price
Non Funded Facilities Non Funded Facilities
(he facilities where there is no direct involvement of banks fnd! Following are the non&
fnded facilities!
1) Letter of credit L/C
2) Letter of Guarantee L/G
Letter Of Credit Letter Of Credit
A Aetters of Credit BAGCC is a written ndertaking by a bank Bissing bankC given at the
re*est and accordance in a instrction of a byer Bthe applicantC to the seller Bthe
beneficiaryC to effect payment p to a stated sm with in prescribed time limit, against
stiplated docments and provider that the terms and conditions are complied with!
(he Bank grops AGCs into two categories!
1) Sight L/C
2) Usance L/C
Letter of Guarantees Letter of Guarantees
(hese facilities cover a nmber of specific types of garantees that the Bank may isse
for its cstomers bt in all cases the common factors areL
(he Bank sbstittes its own credit standing for that of its cstomer,
$o actal movement of fnds takes place at the time of issing the garantee
Shipping Guarantees Shipping Guarantees
3arantees of this natre are re*ired to enable cstomers to release goods before the
arrival of the docments of title0 they therefore render the Bank liable to the shipping
company to whom the garantee has been issed! (he shipping company is, in trn liable
to the tre owners of the goods in the event the goods are released wrongflly!
Bid Bonds (BB) Bid Bonds (BB)
(he prpose of a bid bond is to sbstantiate the ability of a person sbmitting the tender
to perform the contract when awarded! #ch a bond is issed in connection with a tender
and its normal characteristic is an ndertaking by the Bank on behalf of the applicant to
pay the beneficiary a fixed amont within a stiplated period on his simple written
demand if the applicant withdraws his obligation after the acceptance of his tender!
A bid bond mst not contain any conditions linking it with performance of a contract if
awarded and mst contain a definite expiry date! )f branches are asked to give sch
ndertakings the garantees mst be treated as 'erformance Bonds! )f there is any
ambigity in the terms of a bid bond which a branch is asked to sign it shold stdy the
basic [conditions of tender[ to ascertain its precise liability! Branches mst insist on the
retrn of the original bid bond after its expiry!
Advance Payment Guarantees (APG) Advance Payment Guarantees (APG)
Civil engineering contracts, particlarly those awarded by local governments, sometimes
provide for an advance payment to be made to the contractor for prposes sch as
mobilizing site, plant and e*ipment! )n order to obtain this payment the contractor is
re*ired to prodce an Advance 'ayment 3arantee!
Financial Guarantees Financial Guarantees
Financial 3arantee is a general description of varios garantees whose main
characteristic is an ndertaking to meet any claim from the beneficiary p to a fixed sm
on simple demand! Claims nder sch garantees mst not be made contingent on the
non&flfillment of the terms of contracts, which are nknown to the isser! Dnless the
creditworthiness of the concerned cstomer is ndobted, sch garantees shold be
issed against fll cash margin!
Maximum Maturities Maximum Maturities
Dnless stated otherwise and agreed between the Bank and the borrower, all credits are
repayable pon demand! (he maximm matrityGtenor for facilities is as follows! Any
deviation from maximm matrityGtenor will re*ire approval from Head ;fficeL
Documentation for Considering Credit Facilities Documentation for Considering Credit Facilities
.hile considering credit facilities, following docments shold be given special attention
as they serve to bring to light the vary factors that play an important part in facilitating
[Credit 3ranting and Credit Enhancement[ decisions!
1. 1. Visit Report Visit Report
2. 2. Status Reports Status Reports
3. 3. Credit Line Proposal (CLP) Credit Line Proposal (CLP)
i) *ro8osition
iiD *ur8ose
iiiD Ba9kground
i>D (anageent
>D Finan9ia, StateentsB
>iD (arket?$o8etitorsB
>iiD $ondu9t of A99ountB
>iiiD *rofitabi,it! to BankB
iED $IBR
ED Se9urit!
EiD Re9oendation
Credit Files
A QCredit+ file mst be maintained for every borrowing accont as it provides all the
relevant information when considering credit facilities! (he file shold containL
Review Diary:
Internal Memos:
Correspondence
Insurance Policy & Stock Reports:
Opinions / Copies of Charge Documents:
Financial Reports / Valuation/ CIB /Credit Reports:
CREDIT CYCLE
Request
Request
Request
Lets Look Ahead Towards a Brighter Future Together
Processing
Infor
mation
&
Decision
Request
Offer
Purification of
the
Do
cu
Disbursement
of
Lo
Monitoring
Renewal /
Re
vis
e /
77
FINAN$IA) ANA)YSIS FINAN$IA) ANA)YSIS
Background Background
BAA was incorporated in /881 as Habib Credit and Exchange Bank Aimited to take over
three 'akistan branches and assets of BCC)! (he bank remained a wholly owned
sbsidiary of Habib Bank Aimited BHBAC till its privatization in the second half of /885!
An Ab "habi based consortim of investors ac*ired 52E stake in the bank in /885
while the balance B:2EC held by HBA till the consortim also ac*ired 1221! (he
chairman of the board, H!E! #heikh Hamdan Bin %abarak Al $ahayan, is also member of
the Exective Concil of the Emirates of Ab "habi and of Higher Consltative
Committee for "evelopment of Ab "habi Emirates! He is also the chairman 3lf Air,
"epartment of Civil Aviation, Ab "habi and Ab "habi Aviation! (he present chief
exective of the bank is a career banker with over 92 years experience both within
'akistan and abroad and has been with the bank since its incorporation! BAA is providing
a fll range of banking facilities! (he ftre strategy of the management envisages
contination of high growth, expansion of branch network and
)ntrodction of new prodcts!
"ring 1221, the banking sector, by and large, experienced a robst deposit led growth,
bt the Aacklster credit demand compelled banks to invest a larger proportion of these
fnds in government secrities, reslting in decline of credit to deposit and borrowings
ratio! .hile the proportion of pre e*ity depicted a declining trend owing to overall
growth in assets, its impact was generally netralized by the srpls on revalation of
investments, mainly government secrities! However, the CA, benefited from the change
in risk profile of assets and was largely maintained! )nterest based revenes are
increasingly nder pressre across the sector de to intense competition and declining
yields on the government secrities! 3oing forward, identification of ntapped credit
avenes, improvement in operational efficiency and Enlargement of non&fnd based
revenes are critical for the banking sector to sstain its performance! BAA is better
positioned than peers de to its proactive management )n expanding its consmer&
financing not flly niche, BAA is expected to benefit from its increased otreach throgh
its branch expansion!
BAA, despite redction in spreads, maintained its profitability, de to sbstantial volme
growth and increasing trend in non&fnd based income, thogh it was slightly lower
compared to growth in net interest revene! (hogh BAA+s operating cost increased in
line with network expansion, the cost&to&total net revene improved de to higher growth
in revenes! Aike other banks, BAA has been flsh with li*idity de to significant
growth in deposits! However, BAA deployed its assets efficiently by increasing its
advances portfolio throgh identification of new bsiness avenes!
"ring 122:, BAA, in addition to maintained focs on trade finance, plans to frther
expand its consmer&financing base by starting hosing finance and also intends to
ventre into financing of agro&based indstry to enhance its market share and diversify its
credit portfolio!
BAA has contined its trend in the 122: of increasing cstomer deposits, advances and
investments, which is in line with the pro-ected figres of the bank for the year
122:!$on&fnd based income is increasingly nder pressre de to stiff competition in
the sector0 the impact is expected to be managed, largely by increase in volmes! BAA is
also planning to expand its branch network!
! However, the bank+s profitability remains nder pressre in case the otcome of
recovery efforts is not according to the management+s expectations! BAA+s e*ity&to&total
assets ratio, which was the lowest in the peer grop declined frther with conse*ential
impact on CA,, even after taking into accont the tier )) capital represented by the (FC!
However, the sbstantial srpls on revalation of investments X not recognized for
prposes of CA, X provides considerable comfort! .hile the senior nsecred creditors
BdepositorsC derive additional comfort from the strctre of the (FC, the (FC holders are
exposed to relatively higher risk, as the obligations towards the (FC holders are
sbordinate to those of the senior nsecred creditors BdepositorsC of the bank!
Conse*ently 'AC,A assigns an AV BA plsC rating to the (FC, that is, one notch below
BAA+s entity rating!
Ref: The Pakistan Credit Rating Agency (Pvt) Limited.
RATIO ANA)YSIS RATIO ANA)YSIS
Earning Assets to Total Assets: Earning Assets / Total Assets Earning Assets to Total Assets: Earning Assets / Total Assets
2004 12,443,4596 / 15,483,4534 80.36
2003 85,557,449 / 98,952,499 86.46
Earning assets to total ratio tells s abot the bank management efficiency to
tilize the earning assets to get retrn! Earning assets inclde loans, investment
secrities and money market assets! (he BAA earning assets to total assets is
slightly decline as compare to previos year! Bt after comparison with last year
we can easily find ot that total assets and earning assets are increasing becase
BAA is going to expand its network!
Return on Earning Asset: Net income / Earning Assets Return on Earning Asset: Net income / Earning Assets
2004 10,91,989 / 12,434,596 0.87
2003 2,123,234 / 85,557,449 2.48
,etrn on earning assets can help s abot the measrement of profitability! Better ratio
means good tilization of earning assets by bank management to earn profit! )f we
compare this years ratio that is 2!65E as compare to previos year that is 1!96E! (he
difference shows decrease! .ith the help of better tilization of assets has slightly
decreased!
Interest margin on Average Earning Assets Interest margin on Average Earning Assets
2004 3,185,744 / 12,443,4596 2.56
2003 2,004,803 / 85,557,449 2.34
(his is a key determinant of bank profitability, for it provides an indication of
management+s ability to control the spread between interest income and interest expense!
(he ratio of 122: is 1!:9E as compare to 1229 vale that is 1!47E! (he ratio is slightly
increased, may be the reason behind is that slight increase in rate of interest by #B'!
;therwise 3overnment gives more relaxation for investors to increase their investment in
different areas like #%E sector etc!
Equity Capital to Total Assets: Average Equity / Average Total Assets Equity Capital to Total Assets: Average Equity / Average Total Assets
2004 4,369,072 / 154,834,534 2.8
2003 3,253,416 / 98,952,499 3.29
(he ratio another name is fnds to total assets! (his ownership provides the cshion
against the risk of sing debt and leverages! (he higher the ratio then more cshions is
there and lower cshion with lower ratio! BAA ratio in 1229 is 1!6E as compare to :!18E
in 122:, which show the slight decrease and last time more shares were floating in the
market that made this ratio even better in 122: vale!
Deposits times Capital: Average Deposits / Average SHE Deposits times Capital: Average Deposits / Average SHE
2004 129,714,891 / 4,369,072 29.68t
2003 76,698,322 / 3,253,416 23.54t
(he ratio of deposits time+s capital concerns both depositors and stockholders! (o some
extent, it is a type of debtGe*ity ratio, indicating a bank+s debt position! As ) define
above, more capital implies a greater margin of safety, while a larger deposit base gives a
prospect of higher retrn to stockholders, since more money is available for investment
prpose! (he overall this ratio is very good in last two years! (his ratio is increase in
1229 than 122: from 1:!49t to 18!76t respectively! "eposits are increased by 96E so
more deposits are available for investments are there and e*ity is doble approximately!
Loans to Deposits: Average Total Loans / Average Deposits Loans to Deposits: Average Total Loans / Average Deposits
2004 88,913,400 / 12,971,4891 68.54
2003 49,216,120 / 76,698,322 64.17
Average total loans to average deposits are a type of asset to liability ratio! As we know,
loans make p a large portion of the bank+s assets, and its principal obligations are the
deposits that can be withdraw on re*est! (his ratio is increased from 79!/5Ein 122: to
76!49E in 1229, bt it+s not a good sign from debt point of view becase it+s indicating
the increase in risk!
ROA: Net Income / Total Assets ROA: Net Income / Total Assets
2004 10,91,989 / 154,834,534 0.70
2003 2,123,234 / 98,952,499 2.14
(hrogh that ratio we measre the ability of bank to tilize its assets to create profits by
comparing profits with its assets that generating profits! (he BAA ratio is incredibly
decreased : times as compare to 122: ratio! )n 1229 this ratios is 2!52E as compare to
122: ratio of only 1!/9E! (he reason is behind is that BAA income is exceedingly
decreased in 1229 as compare to preceding year!
ROE: Net Income / Total Equity ROE: Net Income / Total Equity
2004 10,91,989 / 4,369,072 24.99
2003 2,123,234 / 3,253,416 65.26
,etrn on E*ity is informs s abot the retrn for shareholders! (hat also shows
incredible decrease approx! three times! #hareholders coldn+t any effect on this ratio
becase the reason is that income is nexceptionally decreased! (he 1229 ratio is 19!88E
as compare to 122: vale of 74!17E
Profit before Tax Ratio: PBT / Gross Markup Income Profit before Tax Ratio: PBT / Gross Markup Income
2004 1,653,734 / 5,620,203 29.42
2003 3,505,680 / 4,033,380 86.92
For banking sector, profit before tax ratio is very mch important becase large amont is
dedcted in shape of taxes! Banks profit before tax ratio is incredibly decreased in 1229
that is 18!91E as compare to 122: vale 67!81E!
Basic Earning per Share: Net Income / # of outstanding shares Basic Earning per Share: Net Income / # of outstanding shares
2004 10,91,989 / 200,000 5.45 Rs.
2003 2,123,234 / 200,000 10.62 Rs.
(his ratio is the most interesting area for stockholders and management too! (his ratio
tells that how mch rpees yo can earn against each otstanding share! Alls ratio
shows decrease becase of decrease in the growth in ftre perspective and
nbelievable change in income compare to preceding year in 122:!
Book Value per Share: SHE / # of outstanding shares Book Value per Share: SHE / # of outstanding shares
2004 4,369,072 / 200,000 21.84
2003 3,253,416 / 200,000 16.27
Book vale per share ratio tells s abot the original vale of shares in books of accont!
BAA book vale per share ratio increased as compare to preceding year! 1/!69 in 1229
shows incredible increase as compare to 122: vale that is /7!15!

S7OT ANA)YSIS S7OT ANA)YSIS
Strengths Strengths
Alfalah have moved rapidly in expanding branches network and increasing the range
of prodcts and services!
As BAAs prsing the path of excellence, cstomer satisfaction remains its priority!
)slamic mode of financing in )slamic contry!
Bank Alfalah developing ? delivering the most innovative prodcts manage cstomer
experience, deliver *ality service that contribte to brand strength, establishes a
competitive advantage and enhances profitability, ths providing vale to the
stakeholders of the bank!
(here is fastest processing!
)n comparison to other banks Alfalah providing high excellence services like home,
car, agri&financing, which facilitate bank to get market excellence and move towards
prosperity and development!
Cstomer+s behavior shows that they feel prod to being as an accont holder in Bank
Alfalah!
Cstomer gives sggestion for the improvement of bank!
Bank having good friendly environment, secrity system concentration like cameras
installed and secrity gards available all the time!
%odernized banking system with highly integrated informative system, record kept
properly, online banking, and integrated circits between branches and personal compter
provided at every desk!
Higher management committed to the development, *ality, and continos
improvement!
(hey have wide area network in all over the 'akistan, so that they cover a lot of
portion of cash transactions and make cstomer satisfied!
Entertainment facilities are available in the Bank when cstomer goes to the Bank for
a longer time they will en-oy newspaper, magazines, television and serve with tea, soft
drink, sweets and snakes etc!
#trong policy and concepts are clearB)slamic bankingC
Weaknesses Weaknesses
'eople are not well aware abot the prodcts of Bank Alfalah, it shold advertise
extensively!
%ismanagement of time is another big mistake in Bank Alfalah branches!
'rofit rate is higher!
#hort team
$o arrangements for staff training!
$o innovation in )B" prodct!
.eak marketing strategies!
Bond to lease only new vehicles!
Opportunities Opportunities
Easy prodcts
3ood opportnity to learn ? earn!
;pportnity to captre )slamic minded people!
(ime to develop for ftre competition as ftre is for )slamic Banking #ystem!
)t is srronded by many competitors it has an opportnity to aggressive
marketing to increase its bsiness!
3overnment is taking very bold steps to promote )( in 'akistan BankAlfalah has
an opportnity to improve in )( !
(hreats (hreats
Bank Alfalah has many competitors who are continosly increasing their
prodcts and marketing aggressively it may case its cstomer to shift to its
competitors!
(he decrease prchasing power of consmer in the crrent economic sitation of
the contry affecting the bsiness activity speed too mch!
(he privatization of other banks is also a threat for the Bank! "e to the
privatization of the different bank e!g! %CB0 the competition has increased a lot!
"ifficlt to clear the misconception of cstomer abot )slamic Banking!
(hreat of #haria Adit!
)ncreasing ),,
RECOMMENDATIONS
Finally, we are giving some sggestions for Bank Alfalah Aimited! (hese sggestions are
based on or experience with bank!
Hman ,esorces "epartment shold be there, to motivate and trained the
employees!
Dnder no circmstances che*e book shold be given to the cstomer if the
accont formalities are incomplete!
(here are two officers involved in cash deposit process! #imilarly, there are two
officers involved in che*e payment process, which is time consming!
Che*es, which are drawn on Bank Alfalah Branch and retrned npaid in
clearing, are not reflected in the statement of accont of the cstomers! (hese
che*es mst be reflected in the acconts so that credibility of the cstomers may
be assessed!
Adit shold be held internally,
.hen giving the loan, the Bank mst careflly analyze the past six months
transaction history of the borrower! (his will help in -dging the dealing behavior
and financial stats of the client!
(he Bank shold try to give more loans to the small borrowers as the past history shows
that most of the loans given to the corporate borrowers have converted into bad debts!
OBSERVATION & CONCLUSION
"ring the period of my internship, ) have fond Bank Alfalah a financially sond bank!
)ts profits are increasingly year&by&year! )ts staff is very good and well&groomed dring
the banking hors! Bank Alfalah nder the leadership of #heik $ahayan %abarak Al&
$ahayan has made significant progress in bilding and strengthening both the corporate
and retail banking sectors in 'akistan! (he bank attained nmber 1 positions in terms of
its balance sheet size amongst the private banks in 'akistan in the year 1222!
Bank Alfalah views specialization and service excellence as the cornerstone of its
strategy! (he people at bank realize that innovation0 creativity, reliability, cstomized,
services and their exection are they key ingredients for their ftre growth! ,evenes
from these activities have started yielding dividends and they expect significant growth!
(hey are aware that they have stepped into the 1/
st
centry and they mst meet its
challenges by ac*iring the highest level of the technology! (hey will ths be
accelerating their technological advance to enable them to distribte their prodcts and
services throgh most efficient and high tech means!
(heir ftre plans are to contine to invest in the modern tools and sbstantial allocation
of resorces will be made to achieve this ob-ective dring the crrent year and in the
coming years as well! ;nline banking has already been started and the introdction of
A(% at strategic locations has prepared Bank Alfalah to stand in line with its
competitors! (he competition in the banking sector of 'akistan is very togh nowadays
and the road to the ltimate sccess is not *ite steady bt still armed with creativity,
high *ality services, flly competent hman resorces and the continos technological
advancements Bank Alfalah can reach its destination!
BA)AN$# SH##T BA)AN$# SH##T
BALANCE SHEET AS AT DECEMBER 31, 2004

Note 2004 2003
Rupees'000
Assets
Cash and balances with treasry banks
6
/8,526,4/6
6,91:,:88
Balances with other banks
8
:,/6:,845
717,8/5
Aandings to financial instittions /2 & 5,9:5,5::
)nvestments
//
:4,42:,/87
16,82:,487
Advances
/1
66,8:/,922
98,1/7,/12
;ther assets
/:
:,117,848
/,4::,/26
;perating fixed assets
/9
9,162,429
1,58/,717
"eferred tax asset

&
&
/49,6:9,4:9 86,841,988
LIABILITIES
Bills payable
/4
1,1::,75/
/,126,75/
Borrowings from financial instittions
/7
/1,51:,6:2 /:,/15,549
"eposits and other acconts
/5
/18,5/9,68/ 57,786,:11
#b & ordinated loans
/6
/,688,962 798,592
Aiabilities against assets sb-ect to finance ease

&
&
;ther liabilities
/8
1,514,:99 1,/67,549
"eferred tax liabilities
12
154,6:9 :1:,2/2
/98,45:,242
89,/89,14/
NET ASSETS 4,17/,969
9,546,196
REPRESENTED BY
#hare capital 1/ 1,422,222 1,222,222
,eserves /,226,551 582,:59
Dnappropriated profit 672,:22 97:,291

9,:78,251

:,14:,9/7
#rpls on revalation of assets 22 681,9/1 /,229,6:1

4,17/,969

9,546,196
CONTINGENCIES AND COMMITMENTS 23
*ROFIT & )OSS STAT#(#NT *ROFIT & )OSS STAT#(#NT
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31, 2004

Note 2004 2003
Rupees'000
%ark&pG retrnG interest earned
19 4,712,12:

9,2::,:62
%ark&pG ,etrnG )nterest expensed 14 9,9:9,948 1,216,455
$et mark&pG )nterest income :,/64,599 1,229,62:
'rovision against non&performing loans
and advances & net
/1!9 B:52,126C B65,28/C
'rovision for dimintion in the vale of
investments
& &
Bad debts written off directly B:4/C B9/6C

B:51,519C

B65,428C
$et mark&p, interest income after
provisions
1,6/:,212 /,8/5,189

NON MARK-UP/INTEREST INCOME
Fee, commission and brokerage income
754,676

:88,:6:
"ividend income 41,4:8 //1,2/5
)ncome from dealing in foreign crrencies 1/6,612 /27,696
;ther income
17
451,611 1,55:,42:
(otal non&mark pO interest income
/,412,298

:,:8/,54/
9,:::,278 4,:28,294

NON MARK-UP/INTEREST EXPENSES
Administrative expenses
15
1,755,7:4 /,588,982
;ther provisionsO .rite offs & 1,222
;ther charges
16 /,522

/,654
(otal non&mark pO interest expenses 1,758,::4 /,62:,:74
PROFIT BEFORE TAXATION /,74:,5:9 :,424,762
(axation 18 47/,594 /,:61,997
PROFIT AFTER TAXATION /,28/,868 1,/1:,1:9
Dnappropriate profit broght forward 97:,291 142,242
(ransfer from general reserve & &
(ransferred from srpls on revalation of
fixed assets & Crrent year net of tax
1:,775 /9,924

'rofit available for appropriation 1,256,786 1,7:5,768

APPROPRIATIONS
(ransfer to stattory reserve
B1/6,:86C

B919,795C
)sse of bons shares & )nterim Z ::!:: E
B 122/L $ilC

B422,222C

B/,222,222C
Cash dividend Z14E B122/L $ilC
B422,222C

B142,222C

B/,1/6,:86C

B/,759,795C
Dnappropriated profit carried forward
672,:22

87:,291
Basic and diluted earnings per share :2
9!5: 6!98
The annexed notes form an integral part of these accounts.

$ASH F)O7 STAT#(#NT $ASH F)O7 STAT#(#NT
CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2004

Note2004 2003
Rupees'000
CASH FLOW FROM OPERATING ACTIVITIES
'rofit G BlossC before taxation
/,74:,5:9

:,424,762
AessL "ividend income B41,4:8C B//1,2/5C
/,72/,/84 :,:8:,77:

Adjustments for non-cash charges
"epreciation :89,997 /67,459
Amortization & intangible assets //,667 1/,264
'rovision against non&performing advances :52,126 65,28/
'rovision for dimintion in the vale of
investments
1,/74 &
'rovision against other assets
&
1,222
Bad debts written off directly
:4/
9/6
3ain on sale of fixed assets
B9,185C
B7,82:C
'rovision for gratity 15,4:/ 1/,287
521,182 ://,:7/
1,:2:,964 :,524,219

(Increase) / Decrease in operating assets
Aendings to financial instittions B7,565,5::C B1,52:,::4C
Advances
B92,264,6:8C

B12,8:9,61:C
;thers assets B/,754,8:C B921,216C
B:9,859,228C B19,292,/67C

Increase/ (decrease) in operating liabilities
Bills 'ayable /,214,222 998,5/2
Borrowings from financial instittions B92:,819C B5,282,/56C
"eposits 4:,2/7,478 14,2/:,::6
;ther liabilities /,:16,:6: 9:6,//4
49,877,216 :1,88/,:9/

11,811,21/

/1,747,/58
3ratity paid
B15,4:/C

B5:,45:C
)ncome tax paid
B/,:94,841C

B4:8,418C
$et cash flow from operating activities
12,811,21/

/1,29:,255
CASH FLOW FROM INVESTING ACTIVITIES
$et investments in available&for&sale secrities
B11,979,478C

B7,287,568C
$et investments in held&to&matrity secrities
B15,54:,228C

B765,412C
$et investments in held&for&trading secrities
B16:,274C

&
)nvestment in sbsidiary companies
B::,722C

B91,222C
)nvestment in associated company
B/,/:6,/57C

&
"ividend received
49,718

/15,:68
)nvestments in operating fixed assets
B/,586,/94C

B598,55/C
#ale proceeds of fixed assets disposed of
5,/84

:1,857
$et cash flow from investing activities

B6,958,721C

B5,9/4,5/4C
CASH FLOW FROM FINANCIAL ACTIVITIES
)ssance of (erm Finance certificates
/,142,222

&
,edemption of (erm Finance Certificates
B172C

B172C
"ividend paid
B422,222C

B142,222C
$et cash flow from financing activities
598,592

B142,172C
Increase in cash and cash equivalents
/:,/81,/48

9,:55,/21
cash and cash e*ivalents at beginning of the
year
8,522,:/7

4,:1:,1/9
cash and cash e*ivalents at end of the year
31 11,681,954

8,522,:/7
Historical Overview of Bank Alfalah
Bank Alfalah Aimited was incorporated on @ne 1/st, /885 as a pblic limited
company nder the Companies ;rdinance /869!
)ts banking operations commenced from $ovember /st, /885! (he bank is engaged
in commercial banking and related services as defined in the Banking companies
ordinance, /871! (he Bank is crrently operating throgh /29 branches in :7 cities, with
the registered office at B!A!Bilding, )!)!Chndrigar, <arachi!
#ince its inception, as the new identity of H!C!E!B after the privatization in /885, the
management of the bank has implemented strategies and policies to carve a distinct
position for the bank in the market place!
Bank Alfalah ;pened its %ltan branch in %ay, /888 that is sitated at Abdali ,oad
%ltan! Crrently Bank Alfalah has for conventional and one )slamic Banking Branch
in %ltan!
#trengthened with the banking of the Ab "habi 3rop and driven by the strategic
goals set ot by its board of management, the Bank has invested in
revoltionary technology to have an extensive range of prodcts and services!
(his facilitates or commitment to a cltre of innovation and seeks ot synergies
with clients and service providers to ensre ninterrpted services to its cstomers! .e
perceive the re*irements of or cstomers and match them with *ality prodcts and
service soltions! "ring the past five years, we have emerged as one of the foremost
financial instittion in the region endeavoring to meet the needs of tomorrow today!
Vision
(o be premier organizations operating
Aocally and internationally that provides the complete
,ange of financial services to all segments nder on roof!
Mission
(o develop and deliver the most innovative prodcts,
%anage cstomer experience, deliver *ality service that
Contribtes to brand strength, establishes a competitive advantage
And enhance profitability, ths providing vale to the
#takeholders of the bank!
Products of Bank Alfalah
Crrent AGC
,oyal 'rofit B#aving AGCC
Car Financing
Home Financing
#%E Financing
Corporate Financing
'ersonal Financing
Credit Cards
decision&making!
'olitical
Ecological/environmental issues: 'olitical conditions are stable for the banking
bsiness and 3overnment is also spportive! %any of the banks are coming in the
market and de to increasing nmbers of banks in market competition among
banks are also increasing which is increasing the efficiency of banks!
Legislation: ,les and reglations abot banking are very lenient in 'akistan!
Banks are free to extend their branches and prodcts!
Regulatory bodies and processes: ,eglatory body in 'akistan is #tate Bank of
'akistan which is central bank! #B' has very defined rles for its schedled banks
which are helpfl for the banks! All the policies ? processes for banks by #B' are
flly exected ? followed by all commercial banks!
Government policies: 'olicies by the government are spportive ? encoraging
for the existing and new banks in 'akistan! (hey can easily invest, captre the
field and can do bsiness as they want
Funding, grants and initiatives: 3overnment is involved in making fnding ?
grants decisions. 3overnment is also taking initiatives for the boost of
agricltral and different other sectors of the banks!
Economic
Home economy situation: Economy is moving towards the boom now a day de
to the economic policies of the government!
Taxation specific to product/services: (axes are being imposed on all the
prodcts and services with different rates! (axes are comparatively low in the
agricltral sector!
Natural disasters, weather issues: Earth*ake has severally affected the
economy of 'akistan in the last few months bt nsal floods, rains are not
common!
Interest and exchange rates: $ow a day interest rates are comparatively
increasing becase most of the people are relying on loans! Exchange rates are
decreasing and government is taking initiative to make free trade with some
neighbor contries!
#ocial
Lifestyle trends: %ost of the people are relying on bank+s loans and banks have
changed the life of a common person by providing them facilities! Banks have
improved the living standards of the people
Consumer attitudes: Consmers are very mch relying on banks ? their attitde
towards the banks is increasing specially the new generation
Ethnic/religious factors: 'eople in or contry are mch religios and they focs
on )slamic banking, refse the interest!
Advertising and publicity: %ost of the prodcts of the banks need to have
maximm advertisement for the increase of sale! According to the cost benefit
analysis of the prodcts of the banking sector, advertising and pblicity pts bad
impact over the pricing of the prodct!
(echnological
Competing technology development: .orld has become a global village!
Facilities provided by banks in developed contries are now in 'akistan, online
banking, credit cards and A(% are available here in 'akistan for the services of
the cstomers! (o maximize profits, along with new technology banks are
lanching new prodcts to redce fixed costs!
Replacement technology/solutions: Banks in 'akistan have replaced all old,
manal systems with new technology of compters! Compters have made the
employees to do work easily! (ransactions by cstomers are now easily held with
this new system!
Information and communications: $ow banks are at that stage, cstomers can
take information from website of the bank and they are providing toll free
telephone nmbers to cstomers for their help dring 19 hors a day this is very
sitable for the farmers!22
ney 3ram B%oney (ransferC
#trengths
End-user sales control and direction: Bank Alfalah has a good reptation and
having a good relationship in the market0 bank can better manage its sales
transaction by ptting the best control system on the dealers!
Right products, quality and reliability: ,ight prodct, *ality and reliability are
the main characteristics of the Bank Alfalah! )t has created ni*eness in the mind
of the cstomers!
Products availability at authorized dealers: Jarai Falah prodct will be
available at all the affiliated companies otlets and the cstomers will not feel any
type of difficlty in prchasing the prodct and the athorized dealers will
provide them genine prodct withot any fake!
Superior product performance vs. competitors: Jarai Falah is covering many
of agricltre prodcts and with low interest rates as compared to competitors
which is reliable for cstomer!
Better product life and durability: Jarai Falah has affiliated with best prodcts
companies and providing the prodct in cstomer regions and in case of need
more loan according to terms and conditions of the agreement can be sanctioned
for the convenience of cstomer!
Some staff has experience of end-user sector: Bank Alfalah has hired the staff
which is flly aware from the domestic areas of region, having field experience in
that area and recognized in the well known persons of the area!
Have customer lists: Bank Alfalah has affiliated companies sch as byer crops
which is having a lot of field experience for the pesticide prodcts and have got
the list of all the cstomers related to agricltre sector for personal meetings and
also making them loyal!
Product innovations ongoing: .ith the passage of time and according to need of
cstomers advance featres and policies for the betterment of cstomers can be
inclded in the existing prodct! (his innovations and cstomer care will make
the cstomer satisfied and loyal!
Can serve from existing sites: (he affiliated companies are having their otlets
already in the targeted areas so the cstomer can easily approach to the sale point!
Processes are managed: 'rodct will be issed to cstomer throgh a card
system which is more secre and affordable and the cstomer receives a slip of
each transaction! )t will better manage the internal control system of the bank and
there are 2 E chances of frad and fake in this process!
Management is committed and confident: Bank Alfalah is a bank with a good
cstomer service *ality and each and every transaction is made confidential with
respect to the cstomer! Becase the process of these credit transactions and
issing of prodct is flly managed and preplanned that+s why management and
the cstomer will be flly satisfied and confident!
#egmentation
Geographical Area:
3eographically we have divided areas into following grops
/! %ltan, Aodhran, %zaffar 3arh, Pehari
1! %ltan ,egion B%ltan, Aodhran, %zafar 3arh, Pehari,
Bahawal pr, ,ahim yar khan, sadi*abadC
:! 'n-ab B.holeC
9! 'akistan B.holeC
Harvesting Area:
According to the land capacity of the farmer, with a minimm land of 4 acres, we have
divided it into following categoriesL
/! 4 X /2 acres
1! // X 14 acres
:! 17 X 42 acres
9! 4/ X 54 acres
4! Above 54 acres
(argeting
Bank Alfalah is taking a three&phase approach to market targeting, initially targeting the
%ltan region B%ltan, Aodhran, %zafar 3arh, Pehari, and ad-acent rral areasC with
#hort (erm goods of BByer Crops, 'n-ab seeds corporation, 'akistan #tate oil, Fa-i
FertilizersC as phase one! ;nce these markets have been penetrated, Bank Alfalah will
move on to the Aong (erm commodities of BChief "iesel Engine, @afari )ndstries C and
also will increase the region Bwhole 'n-abC and finally into whole 'akistan with all
mentioned short term and long term goods inclding tractor! (his approach will allow
or limited sales force and marketing dollars to more closely target their efforts
'ositioning
Bank Alfalah is owing a good position in the minds of cstomers and also in the banking
market de to its best services and aggressive banking, it shold also be best in the
agricltre sector, in revene generating and flfilling the needs of the cstomers,
/! 'rodct offered will be best in *ality and reasonable in price with low mark p
and easy repayments as compared to the other prodcts in the market offered by
different companies and banks!
1! "ifferent changes according to the re*irement will be made for the convenience
of the cstomers after the approval, this will make cstomer obliged and loyal!
:! #ale territories will be expended according to the targeting policy and more
otlets will be allocated with the passage of time!
9! Bank sale force members will continosly visit the different areas and
personally to the farmers to know their views and sggestions!
Sales Strategies
;r sales strategy is oriented toward the idea of arming the sales force with information
so they completely nderstand both the prodct and the market and can hit the grond
rnning! .e will also be training the staff within or own training center, so the sales
staff will have first hand knowledge of the prodct!
;r sales team Binitially three representatives and a sales managerC will be divided by
geographic territory and will be on a base salary pls commission strctre! (hey will
each go throgh two week&long training sessions!

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